Analyst Note
| Philip Gorham, CFA, FRM |Underlying trends in the U.S. cigarette industry appear to be intact following Altria's first quarter results, which included very strong shipment numbers, with comparability affected by a number of technical issues. Aside from adjusting for the timing of some of the company's shipments that were brought forward into the first quarter, we are making only modest tweaks to our estimates for the remainder of the year and our longer-term outlook is unchanged. We are reiterating our wide moat rating and $54 fair value estimate. As of May 4, Altria continues to appear undervalued, although we think there is more upside to Imperial Tobacco and Philip Morris is the more defensive, high-quality pick of the group.