Altria Group (MO) shares continued gains for seven straight sessions, as the stock closed 0.42% higher at $61.84 on Friday.
The Marlboro maker’s shares gained over 10% in the preceding six sessions. On a year-to-date basis, the shares have gained 6%, outpacing the broader market, which rose by 1.45%.
Last month, the FDA issued Marketing Granted Orders for Altria’s six on! Plus moist nicotine pouches, including mint, tobacco, and wintergreen flavors in 6 mg and 9 mg strengths, as part of a pilot program.
Turning to the Wall Street community, five out of 15 analysts rated MO a Buy and above, eight analysts have given the stock a Hold recommendation, and two recommended Sell or below.
Looking at Seeking Alpha’s quant rating, MO has a Hold rating with a score of 3.17 out of 5. The company has been graded A+ for profitability but is dragged down by a D grade for growth.
However, Seeking Alpha analysts have issued a Buy call for Altria with six analysts rating it Buy and above, while four analysts suggested to Hold.
Seeking Alpha analyst Ben Holden-Crowther said that Altria remains heavily reliant on traditional cigarettes, with smoke-free products contributing minimally to revenues and earnings. Additionally, oral pouches (on!) also face significant competition from ZYNs (produced by Philip Morris).
“Despite these challenges, MO’s ~10x forward multiple appears cheap, and the 8.6x operating income multiple for cigarettes (based on FY24) as well as the firm’s well-covered 7.5% dividend yield will be attractive to income-focused investors,” Holden-Crowther added, rating it a Buy.
Over the past year, the stock rose nearly 20% so far this year, compared to a rise of more than 16% in the broader S&P 500 Index.