Altria – an alternative perspective

a comment from Ken Odeluga, a senior market analyst at www.cityindex.com.sg

 

Altria’s need to reorient itself to the inexorable march of changing consumer habits and attitudes is thrown into sharp relief by data out overnight (from The Center for Disease Control) showing a significant decline in cigarette smoking among young people, together with a three-fold surge in e-cigarette usage.

Amid these trends, it’s going to be worth keeping a handle on how Altria’s Philip Morris unit is holding up against an expected 49%/51% retail market share in cigarettes.

Investors should also scrutinise Altria’s performance against base-case forecasts of its long-term growth in ‘smokable products’ businesses (all non-cigarette products, including e-cigs) of 3% per annum.

Any shortfall against these two metrics should be just as significant as $MO missing headline forecasts and could put market-expected $8.29bn annual revenue out of reach.

For Q1 results on 23rd April my EPS forecast is 59c-60c. I’m a little under Wall St. which sees 62c (61c-64c range) because I am expecting a slightly higher impact than the average forecast from the stronger US dollar. Wall St. sees $4.129bn for revenue and I’m inclined to agree, but maybe with bias down to $4.127bn.

9 comments ↓

#1 Chris Crawley on 04.17.15 at 11:30 AM

Perhaps this writer is inferring too much from the CDC data and how quickly e-cigs will usurp traditional cigarettes. It is in my view premature to forecast the “demise” of Altria and its stock price.

#2 Si on 04.20.15 at 7:53 PM

the writer is clueless – e-cigs are significantly failing to deliver satisfaction to the consumer and that’s a fact jack

#3 BD on 04.26.15 at 7:43 PM

Si – I would agree. E-cigs growth is a bit deceiving as many folks try them but many go back to cigs.

#4 vapor vixen on 05.01.15 at 1:22 AM

I saw a new product at the NATO show by PaxLabs that they said was different – any body know if it works?

#5 asd@asd.com on 05.01.15 at 1:17 PM

It’s got 5% nicotine level — so much for their “new nicotine technology.” It kind of sets you back like the nJoy King (a great commercial success). Very easy draw like their original ploom product. Feels weird like a USB sticking out of your mouth. These guys talk about Silicon Valley — they’d do better product development if they moved to VA or NC, imho.

#6 Kev on 06.03.15 at 3:48 PM

ASD – You being sarcastic I hope about the Njoy King – from the start it was doomed and time proved it out.

#7 Kev on 06.03.15 at 3:50 PM

by the way folks the mark ten product is sinking and sinking and sinking – did I say its sinking – crazy they don’t do anything with greensmoke

#8 Asd@asd.com on 06.04.15 at 8:12 AM

Altria should have a best in class product- Mark ten is not.

#9 Kev on 06.04.15 at 12:48 PM

you know ASD you’d think they would but nope sucks because they took one of the best products off the market.

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