Altria Group Inc. (NYSE:MO) shares surged nearly 2% on Thursday morning after the company reported better than expected Q2 results. The company posted Q2 non-GAAP earnings per share of $1.23, beating the consensus Street estimate by $0.06. In addition, although revenue fell 12.1% year-over-year to $5.6 billion, it still outperformed analyst expectations by $240 million. Notably, sales increased by 9.9% net of taxes.
The company’s impressive Q2 results benefited from rising smokable products revenue, which increased 8%, boosted by cigarette volume growth and higher prices.
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The Marlboro brand performance impressed during the quarter after gaining significant market share.
In a note to investors, Morgan Stanley analyst Pamela Kaufman wrote:
Notably, Marlboro market share was +50 bps YoY and was +10 bps sequentially, while overall market share increased 10 bps YoY. Better volumes and solid pricing.
Should you invest in Altria Group shares now?
From a valuation perspective, Altria Group shares trade at a P/E ratio of 20.33. The forward P/E ratio of 9.88 will be compelling to value investors. In addition, analysts expect Altria’s earnings to grow by 470% this year, making it attractive to growth investors.
Therefore, as brands like Marlboro continue to gain market share, boosting sales, Altria Group shares will continue to soar. In addition, the company also pays dividends at an attractive yield of 7.09%. So it will also be an exciting investment for dividend investors.
As such, investors should look to add the MO stock to their portfolio ahead of an exciting period.
Technical overview: Altria Group stock price forecast for August 2021
Technically, Altria Group shares seem to be trading within a triangle formation in the intraday chart. The stock appears closer to returning above the 100-day moving average after dropping below last month.
Although MO shares have bounced back after a recent pullback, they are still far from hitting overbought conditions in the 14-day RSI. Therefore, the current rebound could continue through next week.
Investors can target extended gains at about $50.48 or higher at $52.42. on the other hand, the support levels are $47.09 and $45.15. MO shares traded at $48.52 at the time of writing.
Bottom line: the catalyst for buying MO stock now
In summary, Altria Group looks attractive to value investors amid its forward P/E ratio of 9.88. In addition, the company’s earnings growth expectations this year will push the MO stock price higher. Therefore, it could be time to invest in Altria Group stock.
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