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Shares of cigarette manufacturer Altria Group Inc (MO - Analyst Report) hit a new 52-week high, closing at $36.61 on Apr 29, following solid first quarter 2013 results on Apr 25.

Year-to-date, Altria’s share prices have recorded a healthy return of 14.0%. The company’s long-term estimated EPS growth rate is 7.76%. Average volume of shares traded over the last three months came in at approximately 8,257K.

Solid First Quarter Performance

Positive pricing, higher earnings from Altria's equity investment in SABMiller, cost saving initiatives, a lower share count owing to share buyback program and lower interest expense continued to be Altria’s strength.

Altria posted strong first quarter earnings, which were up 10.2% from the prior-year quarter on the back of higher pricing and cost reduction initiatives. Earnings also beat the Zacks Consensus Estimate. Though revenues slipped from the prior-year quarter, gross profits and operating income were up due to strict cost controls.

Overall, we are encouraged by the company’s efforts to adapt to the evolving needs of consumers and develop less harmful non-combustible nicotine containing tobacco products. The introduction of an electronic cigarette during the second half of the year is also encouraging. The growing retail share of most of its brands in the market is a positive. Moreover, the company is well on track to achieve its cost reduction targets.

For 2013, Altria expects its adjusted earnings to range between $2.35 and $2.41 per share, representing a growth rate of 6% to 9% from $2.21 per share in 2012.

Other Stocks to Consider

Altria holds a Zacks Rank #3 (Hold). Another cigarette company Reynolds American Inc (RAI - Analyst Report) carries a Zacks Rank #2 (Buy). Others stocks in the consumer staples sector that are portraying strong upward trend in the bourses are Flower Foods Inc (FLO - Snapshot Report) which carries a Zacks Rank #1 (Strong Buy) and Kellogg Company (K - Analyst Report) with a Zacks Rank #2.

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