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Altria Group Inc MO

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Morningstar’s Analysis

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Economic Moat




COVID-19 Creates Roadbumps for Altria but Underlying Trends Appear Intact in Q1

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.

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Company Profile

Business Description

Altria comprises Philip Morris USA, U.S. Smokeless Tobacco, John Middleton, Ste. Michelle Wine Estates, Nu Mark, and Philip Morris Capital. It holds a 10.2% interest in the world's largest brewer, Anheuser-Busch InBev. Through its tobacco subsidiaries, Altria holds the leading position in cigarettes and smokeless tobacco in the United States and the number-two spot in machine-made cigars. The company's Marlboro brand is the leading cigarette brand in the U.S. with a 40% share.

6601 West Broad Street
Richmond, VA, 23230
T +1 804 274-2200
Sector Consumer Defensive
Industry Tobacco
Most Recent Earnings Mar 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type High Yield
Employees 7,300