2024-04-27 06:03:13 ET
Summary
- Altria's stock has been depressed due to global regulatory concerns and a decline in combustibles, but it has a strong portfolio of alternative nicotine products.
- Altria's recent earnings report showed a decline in smoking and market share loss in some categories, but growth in oral tobacco overall and positive results with NJOY.
- We think the stock is considerably undervalued, and expect that as the business remains stable over time, MO's multiple will mean-revert higher.
- We initiate coverage on MO with a 'Strong Buy' rating.
A few months ago, we penned an article titled "British American Tobacco: 15%-24% Annualized Potential Upside From Now Until 2028".
The main idea behind the article was that global regulatory concerns around tobacco products were overblown, and that British American Tobacco's stock ( BTI ) was significantly undervalued. With dividends, earnings growth, and multiple expansion, we thought the stock could see 15-24% annualized total returns for the coming years, well into the latter half of this decade....
Read the full article on Seeking Alpha
For further details see:
Altria: Don't Overthink This Strong Buy