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Altria Group Inc MO

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Morningstar’s Analysis

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Altria’s Q2 Volume and Margin Performance Show Tobacco Is a Safe Haven Amid Commodity Inflation

Analyst Note

| Philip Gorham, CFA, FRM |

Altria beat our estimates of both net revenue growth and margins in the second quarter, allowing management to raise the bottom end of its full-year guidance. This was a strong set of results that supports our belief that the tobacco group is likely to be a safe haven from the commodity cost inflation that is plaguing manufacturers in other consumer product categories. Trade inventory movements played a large  role in the volume beat, however, and as this should reverse in the coming quarters, we retain our $52 per share fair value estimate.

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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, although the company plans to wind down Philip Morris Capital by the end of 2022. 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 43% share in 2020.

Contact
6601 West Broad Street
Richmond, VA, 23230
T +1 804 274-2200
Sector Consumer Defensive
Industry Tobacco
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 7,100

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