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Altria (MO) Gains As Market Dips: What You Should Know

In the latest trading session, Altria (MO) closed at $49.78, marking a +0.55% move from the previous day. This change outpaced the S&P 500's 0.36% loss on the day.

Coming into today, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had gained 2.4% in the past month. In that same time, the Consumer Staples sector gained 3.41%, while the S&P 500 gained 0.75%.

Investors will be hoping for strength from MO as it approaches its next earnings release. The company is expected to report EPS of $1.17, up 7.34% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $5.4 billion, up 6.58% from the prior-year quarter.

MO's full-year Zacks Consensus Estimates are calling for earnings of $4.59 per share and revenue of $21.4 billion. These results would represent year-over-year changes of +5.28% and +2.67%, respectively.

Investors should also note any recent changes to analyst estimates for MO. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% lower within the past month. MO is currently a Zacks Rank #3 (Hold).

Looking at its valuation, MO is holding a Forward P/E ratio of 10.79. This represents a discount compared to its industry's average Forward P/E of 11.74.

We can also see that MO currently has a PEG ratio of 2.7. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Tobacco stocks are, on average, holding a PEG ratio of 1.97 based on yesterday's closing prices.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 233, putting it in the bottom 9% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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