Altria Reports Next Week. Here’s What to Expect.

A close-up presumption of cigarettes

Matt Cardy/Getty Images

Altria is up 15% twelvemonth to date, not acold down Philip Morris’s (PM) 16.6% gain, but the 2 stocks person diverged the past fewer months.

Altria, which focuses connected the home market, has seen its shares determination mostly sideways since precocious April, on worries about additional regulation on nicotine. Philip Morris, by contrast, is exclusively focused connected planetary markets, and moreover has seen growth in its modified hazard merchandise IQOS, which the institution hopes volition supplant combustible cigarettes.

For Altria’s numbers, analysts are looking for net per stock of $1.18 connected gross of $5.38 billion. That compares with EPS of $1.07 in the erstwhile quarter.

Deutsche Bank expert Steve Powers is 1 bullish dependable up of report. He reiterated a Buy standing and $54 terms people connected the stock, penning that helium expects a mostly in-line 4th from Altria.

Powers noted that the institution has look headwinds successful the past 3 months—including higher prices and pugnacious comparisons—that weighed connected baccy income crossed the industry. That said, helium argued that determination are different reasons to ain the stock. It sports a generous 7.3% dividend yield, portion the winding down of the Covid-19 situation successful overmuch of the U.S. should let for societal gatherings and a much normalized operating environment.

In addition, the institution precocious said it plans to merchantability its vino assets, raising the likelihood that it could exit its concern successful Anheuser Busch InBev (ABI) aboriginal this year.

Powers wrote that “a elemental secondary offering of Altria’s full involvement could rise upwards of $11 cardinal to $12 cardinal successful nett proceeds, though Altria whitethorn yet avail itself of different (potentially much tax-efficient) and/or staggered options for divestiture.”

Write to Teresa Rivas astatine teresa.rivas@barrons.com