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Altria (MO) Marches Higher on Q4 Earnings Beat: Time to Buy?
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Tobacco giant, Altria Group Inc.’s (MO - Free Report) shares have been rising ever since the Marlboro owner reported higher-than-expected earnings in the fourth quarter and full year 2016. Further, investors are buoyed by the optimistic view provided by the company for 2017. In fact, the company’s shares hit a 52-week high of $72.59 on Feb 09, 2017.
Not only that, the company’s shares have gained 17% in the past three months, outperforming the Zacks categorized Tobacco industry which has witnessed a gain of 4%.
What’s Driving the Stock?
Altria’s fourth-quarter 2016 earnings of 68 cents reported on Feb 1, 2017 inched past the Zacks Consensus Estimate by a penny and also exceeded the prior-year quarter figure by 1.5%, driven by higher operating income and lower shares. Leading premium brands in the core tobacco category performed modestly backed by strong pricing power of the company. Further, profits increased due to lower effective tax rate on operations owing to tax benefits associated with a dividend from AB InBev that was larger compared with the dividend received from SABMiller in the previous year.
Although revenue missed the Zacks Consensus Estimate marginally, it inched up 0.1% year over year backed by strong performance of core brands. Moreover, aided by lower excise tax levied on products, gross profit increased 3.9% year over year to $2.82 billion. Operating companies’ income advanced 3.3% to $2.1 billion.
For 2017, Altria remains optimistic and expects to maintain profit on the back of strong pricing power and brand building initiatives. Further, in order to augment its smokeable segment, Altria has taken over privately-held Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman) in Jan 2017. Nat Sherman specializes in super-premium cigarettes and premium cigars. The takeover is in sync with Altria’s growth strategy of expanding portfolio.
Pinnacle Foods Inc. also carries a Zacks Rank #2 and has an expected earnings growth rate of 8.3%.
Con Agra Foods Inc. (CAG - Free Report) , another Zacks Rank #2 stock has an expected earnings growth rate of 8%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Altria (MO) Marches Higher on Q4 Earnings Beat: Time to Buy?
Tobacco giant, Altria Group Inc.’s (MO - Free Report) shares have been rising ever since the Marlboro owner reported higher-than-expected earnings in the fourth quarter and full year 2016. Further, investors are buoyed by the optimistic view provided by the company for 2017. In fact, the company’s shares hit a 52-week high of $72.59 on Feb 09, 2017.
Not only that, the company’s shares have gained 17% in the past three months, outperforming the Zacks categorized Tobacco industry which has witnessed a gain of 4%.
What’s Driving the Stock?
Altria’s fourth-quarter 2016 earnings of 68 cents reported on Feb 1, 2017 inched past the Zacks Consensus Estimate by a penny and also exceeded the prior-year quarter figure by 1.5%, driven by higher operating income and lower shares. Leading premium brands in the core tobacco category performed modestly backed by strong pricing power of the company. Further, profits increased due to lower effective tax rate on operations owing to tax benefits associated with a dividend from AB InBev that was larger compared with the dividend received from SABMiller in the previous year.
Although revenue missed the Zacks Consensus Estimate marginally, it inched up 0.1% year over year backed by strong performance of core brands. Moreover, aided by lower excise tax levied on products, gross profit increased 3.9% year over year to $2.82 billion. Operating companies’ income advanced 3.3% to $2.1 billion.
Altria Group Price, Consensus and EPS Surprise
Altria Group Price, Consensus and EPS Surprise | Altria Group Quote
For 2017, Altria remains optimistic and expects to maintain profit on the back of strong pricing power and brand building initiatives. Further, in order to augment its smokeable segment, Altria has taken over privately-held Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman) in Jan 2017. Nat Sherman specializes in super-premium cigarettes and premium cigars. The takeover is in sync with Altria’s growth strategy of expanding portfolio.
Zacks Rank & Key Picks
Altria currently carries a Zacks Rank #3 (Hold).
One can count on better-ranked stocks Helen of Troy Ltd. (HELE - Free Report) carries a Zacks Rank #2 (Buy) and has an expected earnings growth rate of 10.8%. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Pinnacle Foods Inc. also carries a Zacks Rank #2 and has an expected earnings growth rate of 8.3%.
Con Agra Foods Inc. (CAG - Free Report) , another Zacks Rank #2 stock has an expected earnings growth rate of 8%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>