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.