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Altria (MO) Gains But Lags Market: What You Should Know

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Altria (MO - Free Report) closed at $45.87 in the latest trading session, marking a +0.04% move from the prior day. This move lagged the S&P 500's daily gain of 1.75%. At the same time, the Dow added 1.05%, and the tech-heavy Nasdaq gained 7.84%.

Heading into today, shares of the owner of Philip Morris USA, the nation's largest cigarette maker had lost 1.57% over the past month, lagging the Consumer Staples sector's gain of 0.4% and outpacing the S&P 500's loss of 4.4% in that time.

Altria will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.18, up 8.26% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $5.13 billion, up 0.83% from the year-ago period.

MO's full-year Zacks Consensus Estimates are calling for earnings of $4.84 per share and revenue of $20.79 billion. These results would represent year-over-year changes of +4.99% and -1.52%, respectively.

Any recent changes to analyst estimates for Altria should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 0.03% lower within the past month. Altria is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Altria's current valuation metrics, including its Forward P/E ratio of 9.48. Its industry sports an average Forward P/E of 9.32, so we one might conclude that Altria is trading at a premium comparatively.

Also, we should mention that MO has a PEG ratio of 2.37. 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. MO's industry had an average PEG ratio of 2.93 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 17, which puts it in the top 7% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MO in the coming trading sessions, be sure to utilize Zacks.com.


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