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Will Q2 Earnings Hold a Surprise for Altria (MO) Stock?
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Altria Group Inc. (MO - Free Report) is set to report second-quarter 2016 results before the market opens on Jul 27.
Last quarter, the company posted a positive earnings surprise of 5.88%. Altria reported positive surprises in two of the last four quarters with an average positive surprise of 1.47%.
Let’s see how things are shaping up for this announcement.
Altria reported a strong first half 2016 on a strong notewith both its top line and bottom line improving year over year on higher shipments and retail share gains by its flagship brand, Marlboro. The trend is expected to continue in the second quarter also.
Altria upgraded its shopping website – marlboro.com – which provides engaging content directly to adult smokers through mobile devices. Further, a subsidiary of Altria – PM USA – expanded the distribution of Marlboro Midnight Menthol nationally in first-quarter 2016 to offer adult smokers a strong menthol flavor. The variant has already received favorable response in the test market. These initiatives helped Marlboro gain a leadership in the market. We expect the strategic move to have a favorable impact on the company’s financial result in the soon-to-be-reported quarter.
Further, during the first quarter 2016, Altria’s subsidiary Nu Mark LLC (Nu Mark) stepped up the distribution of MarkTen XL and Green Smoke e-vapor products across several lead markets. This is expected to boost top line in the second quarter..
However, headwinds like the shift in consumers away from tobacco products amid increasing cigarette prices, as well as the rise in worldwide anti-tobacco campaigns, are likely to weigh on Altria’s second-quarter volumes.
Earnings Whispers
Our proven model does not conclusively show that Altria is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass earnings estimates. However, that is not the case here as shown below:
Zacks ESP: Earnings ESP for Altria is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 80 cents.
Zacks Rank: Altria currently holds a Zacks Rank #2, which when combined with an ESP of 0.00% makes surprise prediction difficult.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some stocks that investors may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Calavo Growers Inc. (CVGW - Free Report) has an Earnings ESP of +4.84% and a Zacks Rank #2.
Nu Skin Enterprises, Inc. (NUS - Free Report) has an Earnings ESP of +2.60% and a Zacks Rank #2.
Post Holdings Inc. (POST - Free Report) has an Earnings ESP of +12.77% and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
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Will Q2 Earnings Hold a Surprise for Altria (MO) Stock?
Altria Group Inc. (MO - Free Report) is set to report second-quarter 2016 results before the market opens on Jul 27.
Last quarter, the company posted a positive earnings surprise of 5.88%. Altria reported positive surprises in two of the last four quarters with an average positive surprise of 1.47%.
Let’s see how things are shaping up for this announcement.
ALTRIA GROUP Price and EPS Surprise
ALTRIA GROUP Price and EPS Surprise | ALTRIA GROUP Quote
Factors to Consider
Altria reported a strong first half 2016 on a strong notewith both its top line and bottom line improving year over year on higher shipments and retail share gains by its flagship brand, Marlboro. The trend is expected to continue in the second quarter also.
Altria upgraded its shopping website – marlboro.com – which provides engaging content directly to adult smokers through mobile devices. Further, a subsidiary of Altria – PM USA – expanded the distribution of Marlboro Midnight Menthol nationally in first-quarter 2016 to offer adult smokers a strong menthol flavor. The variant has already received favorable response in the test market. These initiatives helped Marlboro gain a leadership in the market. We expect the strategic move to have a favorable impact on the company’s financial result in the soon-to-be-reported quarter.
Further, during the first quarter 2016, Altria’s subsidiary Nu Mark LLC (Nu Mark) stepped up the distribution of MarkTen XL and Green Smoke e-vapor products across several lead markets. This is expected to boost top line in the second quarter..
However, headwinds like the shift in consumers away from tobacco products amid increasing cigarette prices, as well as the rise in worldwide anti-tobacco campaigns, are likely to weigh on Altria’s second-quarter volumes.
Earnings Whispers
Our proven model does not conclusively show that Altria is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to surpass earnings estimates. However, that is not the case here as shown below:
Zacks ESP: Earnings ESP for Altria is 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 80 cents.
Zacks Rank: Altria currently holds a Zacks Rank #2, which when combined with an ESP of 0.00% makes surprise prediction difficult.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Stocks to Consider
Here are some stocks that investors may want to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Calavo Growers Inc. (CVGW - Free Report) has an Earnings ESP of +4.84% and a Zacks Rank #2.
Nu Skin Enterprises, Inc. (NUS - Free Report) has an Earnings ESP of +2.60% and a Zacks Rank #2.
Post Holdings Inc. (POST - Free Report) has an Earnings ESP of +12.77% and a Zacks Rank #1.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>