Altria: Multiple Disappointments from Investor Day
(Preview) Company Update (MO US) (Buy)
Summary
Altria shares fell 3.7% on Thursday after its investor day, more than other tobacco stocks. They have fallen 17% in the past year.
The dividend is moving from an 80% payout ratio to a mid-single-digit annual increase as EPS will likely become more volatile.
The Medium-term EPS CAGR target has been set at mid-single-digits, formalizing a deceleration from the pre-Juul range of 7-9%.
The Japan Tobacco JV's product will only be ready after 2026, and the new Heated Tobacco Capsule product was underwhelming.
There is no indication the ABI stake will be sold in the near term. We are left with few positives except Altria's 8.7% Dividend Yield.
Introduction
Altria Group Inc. held an investor day on Thursday (March 23). Altria shares finished the day down 3.7% (partly due to Thursday being the ex-dividend date) and are now down 17% in the past year.
We have had a Buy rating on Altria since our upgrade in February 2020. Altria stock has been a disappointment since then, returning only 13.7% in …