Altria Analysts Dissect Q3 Print, Juul Writedown
Tobacco company Altria Group Inc (NYSE:MO)'s third-quarter print was viewed favorably by at least two Street analysts.
Deutsche Bank analyst Steve Powers maintained at Buy, price target lowered from $60 to $58.
BofA: Vaping Crackdown Could Benefit Cigarette Manufacturers
Altria maintained its 2019 guidance of EPS growth of 5-7% and announced its second IQOS store in Atlanta, along with plans for new locations, Lewandowski said in a Friday note.
The company's investments will likely be disciplined and quick to support new markets and longer-term growth, the analyst said.
Altria also announced a $4.5-billion impairment charge related to its investment in Juul ahead of what could prove to be a smaller vaping market, she said.
This could be a positive for big tobacco companies like Altria as users return to cigarettes to satisfy their nicotine fix, Lewandowski said.
Altria remains best-positioned within the market given its "total tobacco strategy" coupled with its ability to be flexible and adaptive to market changes, according to BofA.
Deutsche Bank: Q3 Better Than Expected
Investors should have a favorable reaction to Altria's earnings report, which was highlighted by better-than-expected performance across smokeable volume, total revenue, total EBIT and EPS, Powers said.
On the other hand, cigarette shipments were down in the quarter, but Marlboro's decline of 6% was at a slower rate than other brands, which supported a "robust" price/mix delivery of positive nine points, the analyst said.
Altria's $4.5-billion Juul writedown is a negative in "absolute terms," but marks an event that was likely anticipated given the public challenges Juul faces, according to Deutsche Bank.
Altria shares were trading 0.83% higher at $45.16 at the time of publication Friday.
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