Jefferies Raises Altria’s Target Price by 46% to $58 and Upgrades to Buy

Jefferies raised their stock price forecast on Altria Group to $58 from $40 and upgraded their rating on the company, which engages in the manufacturing and sale of cigarettes in the United States, to “Buy”.

“With tobacco sentiment and value increasingly driven by RRP, we see near-term datapoints at Altria (MO) as favourable. Further, while optically MO’s metrics would appear to be increasingly challenged if the shift away from smokers accelerates, we think this misses significant underappreciated optionality in vapour and cannabis via M&A, especially if selling its ABI stake to fund this,” noted Owen Bennett, equity analyst at Jefferies.

“Increase to price target driven by: 1) Removing 40% probability non-approval of Juul PMTA 2) Sentiment support around RRP, cannabis and ESG by lowering our ERP (11% to 8%) and boosting our “Non-combustible” exit multiple to 24.6x vs 5.9x (implied TGR 4% vs -3%). Upgrade to Buy. Price Target implied EV/EBITDA still doesn’t look challenging relative to global (ex-tobacco) LC consumer.”

Altria Group is expected to report its first-quarter earnings on April 29, 2021 before the market open. According to Zacks Investment Research, the consensus EPS forecast for the quarter is $1.04. The reported EPS for the same quarter last year was $1.09.

Altria’s shares, which slumped about 18% in 2020, surged over 26% to $51.85 so far this year.

Eight analysts who offered stock ratings for Altria in the last three months forecast the average price in 12 months at $50.14 with a high forecast of $58.00 and a low forecast of $40.00.

The average price target represents a -3.30% decrease from the last price of $51.85. Of those eight equity analysts, four rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Other equity analysts also recently updated their stock outlook. Deutsche Bank raised the price target to $54 from $52. Piper Sandler raised their price target to $57 from $47 and gave the stock an “overweight” rating. Royal Bank of Canada reissued a “buy” rating on shares. Sanford C. Bernstein issued an “outperform” rating and a $53 price target on the stock.

Check out FX Empire’s earnings calendar