Altria: Q4 Showed Overall Stability But Partial Headwinds
(Preview) Company Update (MO US) (Buy)
Summary
Altria delivered solid Q4 results, helping to generate a full-year EPS growth of 5.7%; 2022 EPS growth is guided to a similar 4-7%.
The Smokeable segment was steady, though it now faces macro headwinds including post-COVID normalization and inflation.
U.S. E-vapor volume was flat in Q4, positive for Altria. Oral Tobacco profits are falling slowly. No IQOS sales are likely in 2022.
Overall, we expect the core cigarette business to remain stable and serves as the main driver for an annual Net Income growth of 4%.
With shares at $50.40, we expect a total return of 67% (15.9% annualized) by 2025 year-end. The Dividend Yield is 7.1%. Buy.
Introduction
Altria Group, Inc. released Q4 2021 results this morning (Thursday, January 27). Shares are currently up 1.9% (as of 3:40 pm EST).
We upgraded our rating on Altria to Buy in February 2020. Since then, shares have gained 20.6% (after dividends), including 33.6% since 2021.
Q4 results showed that Altria's core cigarette business has remained sta…