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Altria Stock Forecast: Will High Dividends Beat Negative Outlooks?

Altria Group is one of the leading US tobacco manufacturers and sellers. However, the company’s shares have a low value. What are the reasons behind this? Let’s look at analysts’ MO stock forecast and factors that will either boost Altria stocks or pull them down.

The article covers the following subjects:

Altria Group, Inc. Stock: a Brief Overview

Altria Group, Inc. (previously named Philip Morris Companies) is one of the world’s largest manufacturers and sellers of tobacco, cigarettes, and related products. Altria is a parent company of Philip Morris USA, Philip Morris Capital Corporation, John Middleton Inc., Nat Sherman, Nu Mark, US Smokeless Tobacco Company Inc., and Chateau Ste. Michelle wine estates.

Its key operation segments are Smokeable Products, Smokeless Products and Wine. The Smokeable Products segment consists of cigarettes produced and sold by PM USA and large machine-made cigars and pipe tobacco manufactured and sold by Middleton. The smokeless products are produced and sold by or on behalf of USSTC and PM USA. The company is a producer of Washington State wines. Altria owns wineries and distributes wines from several other wine regions.

Check out some data on Altria’s stocks (New York Stock Exchange: MO):

  • Market cap: $92.11 billion

  • Shares outstanding: 1.85 billion

  • Public float: 1.85 billion

  • P/E ratio: 21.36

  • Payout ratio: 75.27% (based on this year’s estimates)

  • EPS: 2.33 

  • Dividend Yield: 6.91%

  • 52-Week Range: 35.83 – 52.59

  • Annual dividend: $3.44

  • MO Three Year Dividend Growth: 0.00%

  • Average volume: 9.26 million shares

The company was founded in 1919. It’s conveniently headquartered in Henrico County, Virginia. However, the firm has had only 5 stock splits. The first one took place on June 3, 1974; this was a 2:1 split. Altria’s 4th stock split was held on October 11, 1989, with a 4:1 ratio. The last split was on April 11, 1997 (3 stocks prorated to 1). Historically, when such industry giants as Altria Group hold stock splits, market capitalization before and after the event is stable, which means the stockholders get more shares. Still, each one is valued at a lower price.

How much is MO stock today? The current price is 46.91 US dollars.

MO’s Return on Equity is predicted to be 318.5% vs. 136.05% (industry) and 44.88% (market) in 3 years (by December 31, 2023). Analysts are sure the company will be able to generate a return on equity efficiently.

Major Factors That Affect The Altria Group, Inc. Share Price in 2021 & Beyond

We won’t talk about common factors that impact the stock price direction of any company. Just to mention them, they include financial outlook, earnings reports, global political and economic events, internal company news, and events in the industry. Let’s discover what can impact Altria stocks in particular.

Loss of Customers

Fewer and fewer people smoke cigarettes and use other tobacco products. Just to compare, in 1965, over 40% of American adults smoked cigarettes. In 2018, this number decreased to 10%. Other statistics show that the percentage of those who smoke cigarettes in large quantities per day has declined. Tobacco businesses are under threat.

Altria can’t control this process. There won’t be such strong demand anymore. Thus, it will keep losing its customers without the ability to turn the situation in its favor. Moreover, it’s unlikely the situation will improve in the future. Although the company raised prices, this strategy isn’t effective in the long term as authorities worldwide keep putting sanctions on tobacco products. Altria will continue struggling.

Weak Investments

The company’s 35% stake in JUUL plunged from $12.8 billion to $1.5 billion (March 2021). An investment in a cannabis company Cronos resulted in a loss of over $200 million. 

Currently, FTC has been trying to prove that Altria, forced by JUUL, pulled its e-cigarettes off the market illegally as the two companies were discussing a deal. The Federal Trade Commission wants to unwind this deal. 

Still, there are two promising Altria brands – iQOS, the heated tobacco developed by Philip Morris International, and On nicotine pouches. If these brands succeed, the stocks will rise.

Regulations

Altria tries to contribute to tobacco regulation. For instance, the company supported legislation to raise the minimum age for all tobacco products to 21.

However, there are other aspects that can negatively affect the value of its stocks. Any restrictions on manufacturing and selling alongside tax refund issues will lead to a depreciation in shares.

Covid-19 and Its Effects

Coronavirus causes problems with the lungs. It’s logical that Covid-19 will continue to affect different industries, including the tobacco one. Cigarette consumption will further decrease.

Altria Stock Prediction for 2021: Analysts’ Recommendations

Will Altria still go up? The average 12-month price target by 12 Wall Street analysts is $51.10. The highest possible price is USD 58.00; the lowest potential rate is $43.00. The consensus rating is “Buy” as 8 out of 12 analysts set it. 4 analysts claim a holding rating.

Morgan Stanley

Analysts at Morgan Stanley boosted the price target for Altria stocks to $52 from $49. The rating is overweight.

Kristina Ruggeri, Argus Research

Kristina Ruggeri at Argus Research lowered the rating to “Hold” from “Buy” without a price target.

Stifel Nicolaus

A full-service brokerage and investment banking firm reiterated the “Buy” rating and placed the stock quote target at USD 56.

Piper Sandler

Analysts at Piper Sandler maintained the “Buy” rating. The price expectation is $57.

Owen Bennett, Jefferies Financial Group

Owen Bennett upgraded the “Hold” rating to “Buy,” improved the Altria Group, Inc. share forecast to $58 from $40.

Technical Analysis of MO Stocks

On the daily chart of MO stocks, there are no strong signals for upcoming price performance. The current trend is uncertain. The price has been moving sideways. The MACD indicator has been trying to cross the 0 level bottom-up, which is a sign of a possible bullish trend. If the price breaks above the upper trendline, the next resistance is at $52.40. If the price drops below the lower trendline, it will open a way to $46 and $44.15 levels. Oscillators give a neutral signal; moving averages predict upward movements on the week-period timeframe.  

On the weekly chart, pivot levels are:

S3 — 42.22

S2 — 45.77

S1 — 47.49

P — 49.32

R1 — 51.04

R2 — 52.87

R3 — 56.42

The price today is 46.91 US dollars.

MO Stock Forecast for 2022

What is the future of Altria stocks? There won’t be an increase next year. Wallet Investor has a weak MO stock price forecast both for 2021 and 2022. The opening price projection in January next year is $45.270, the closing price in December the same year is set at $38.608.

The source predicts a long-term downtrend. The maximum and minimum rates will be near or the same as the opening/closing prices throughout the year. This signals limited market fluctuations. Although low volatility is positive for long-term investors, Altria shares are not the best option to invest in.

Month

Opening price

Closing price

Minimum price

Maximum price

January

45.270

45.006

45.006

45.379

February

44.995

44.941

44.493

44.995

March

45.009

44.485

44.377

45.009

April

44.549

43.313

43.313

44.671

May

43.135

42.842

42.842

43.141

June

42.747

41.890

41.846

42.747

July

41.940

41.474

41.474

42.068

August

41.267

40.089

40.089

41.267

September

40.031

39.084

39.049

40.043

October

39.086

39.733

39.086

39.794

November

39.756

38.783

38.612

39.756

December

38.794

38.608

38.608

39.373

Source: Wallet Investor

MO Stock Forecast for 2023

In 2023, the bearish trend will continue. The price is expected to plunge to $31.811 by December. The future price at the beginning of the year is anticipated to be $38.445.

The avg range between the minimum and maximum rates is slightly above $1. The company’s stocks have one of the lowest levels of price volatility.

Month

Opening price

Closing price

Minimum price

Maximum price

January

38.445

38.195

38.195

38.491

February

38.098

38.111

37.618

38.111

March

38.093

37.645

37.512

38.125

April

37.708

36.528

36.528

37.783

May

36.324

35.943

35.943

36.324

June

35.856

35.054

34.979

35.856

July

35.078

34.478

34.478

35.196

August

34.459

33.190

33.190

34.459

September

33.204

32.218

32.188

33.204

October

32.204

32.913

32.204

32.913

November

32.851

31.868

31.746

32.851

December

31.950

31.811

31.811

32.480

Source: Wallet Investor

Long-Term MO Stock Forecast for 2025 and Beyond

Wallet Investor has the most pessimistic Altria Group stock forecast. According to the Altria stock forecast for 2025, the price will lose more than half of the 2022 forecasted price.

Month

Opening price

Closing price

Minimum price

Maximum price

2025

January

24.730

24.389

24.389

24.776

February

24.203

24.344

23.848

24.344

March

24.369

23.902

23.788

24.415

April

23.975

22.616

22.616

24.075

May

22.529

22.231

22.231

22.539

June

22.053

21.304

21.239

22.053

July

21.363

20.676

20.676

21.441

August

20.648

19.518

19.500

20.648

September

19.435

18.504

18.459

19.455

October

18.465

19.125

18.438

19.198

November

19.019

18.108

18.023

19.023

December

18.217

17.919

17.919

18.752

2026

January

17.837

17.587

17.587

17.906

February

17.403

17.441

16.981

17.441

March

17.489

17.071

16.900

17.544

April

17.057

15.726

15.726

17.204

May

15.709

15.420

15.420

15.709

June

15.253

15.253

15.253

15.253

Source: Wallet Investor

Still, not all the MO stock projections are so negative. The 5-year Altria stock price forecast of Gov.capital is 401.272.

Long-term projections are subject to uncertainties as too many factors affect the volatile stock market. The situation can change rapidly. Thus, MO stock predictions for the long run should be taken with a grain of salt.

Altria’s Price History: Timeline

Historical accuracy is a crucial part of stock price prediction. History repeats itself. Even last month’s price fluctuations will provide ideas on the future price direction. Thus, knowing the reasons for previous stock performance, we have a clue to possible price movements.

The all-time high of $89.40 was set on January 11, 2007. Since then, the price hasn’t come close to that level. Why was Altria going down? A drastic plunge occurred on March 30, when the company announced its plans to spin off Kraft Food. The enterprise owned 84% of the Kraft company. In March 2008, another dramatic fall happened when Altria spun off Philip Morris International.

The attempt to set a new all-time high took place on June 19, 2017, when the stock peaked at $77.78. Nevertheless, the rally didn’t last for a long time. Within 4 days (July 27-31), the rate plunged from $73.96 to $64.97.

An FDA announcement caused a dramatic decline. The Food and Drug Administration said it planned a new tobacco and nicotine regulation, which was anticipated to shorten nicotine in cigarettes to non-addictive levels. The agency was going to review many aspects of the regulation to produce new products that were less harmful than cigarettes.

The price could recover only by December 19, when it reached $74.38. However, it was only a short-term uptrend within the overall dramatic plunge that started in the middle of 2017 and is still in place.

In 2018, the stocks struggled due to the inability to move away from cigarettes and surprisingly awful investments in marijuana-grower Cronos Group and e-cigarettes maker JUUL at the end of the year.

The first drastic decline occurred in April as analysts downgraded the stocks, and Philip Morris reported weak growth from its IQOS product in Japan. Starting the year at $71.51, the stocks plunged to $49.39 on December 31.

The downtrend wasn’t broken in 2019. The price was sliding during the year. There was a significant surge in November when the firm reported strong third-quarter financial data. Quarterly revenue increased by 2%. The report could boost the price, so 2019 was closed at acceptable levels of near to $50.

The rise didn’t last long as coronavirus hit the financial markets at the beginning of 2020. Covid-19, a disease that affects the lungs, wouldn’t contribute to the future growth of the cigarette manufacturer. The price fell to $30 by the second half of March. During the rest of the year, the stocks were stable, fluctuating within the $35-$44 range.

The beginning of 2021 has turned out to be promising for Altria’s shares. In March, the price managed to top $52.59. However, analysts’ price predictions don’t encourage this positive trend.

Is It Good to Invest in Altria (MO)?

How much will Altria stock be worth in 10 years? Although AI Pickup LLC predicts a strong bullish trend for the next 10 years, there are high risks for the Altria stock value. Firstly, the company can’t control the shortage of tobacco consumption. Secondly, the coronavirus pandemic and its effects won’t allow the company to increase sales.

Also, one should keep in mind that such a long-term prognosis is not accurate as there are many factors that can affect the company’s value. Thus, there is no guarantee that the stock price predictions will work.

Year

Average

Minimum value

Maximum value

2021

$51.6

$49.05

$55.8

2022

$80.98

$58.02

$110.94

2023

$116.85

$113.38

$121.38

2024

$119.38

$108.67

$125.03

2025

$97.83

$90.21

$107.45

2026

$103.19

$92.08

$110.35

2027

$94.64

$81.1

$109.25

2028

$92.08

$84.22

$99.47

2029

$101.22

$86.09

$106.51

2030

$85.36

$76.57

$94.25

Source: AI Pickup LLC

The high yield of Altria stocks is attractive. However, if we compare the MO price with the total return, which considers reinvested dividends, we will see that the dividends don’t compensate for the long-term decline in shares. As a result, Altria stocks are not recommended for long-term investment.

Trading is an alternative that allows earning on up- and downward price movements. As Altria’s stock value is hardly predictable, it’s worth starting to trade on a demo account. A Liteforex demo account provides real market conditions and an opportunity to pick up a tool among a wide range of technical indicators, which will help you gain experience without losing money.

Altria Price Prediction FAQ

Price chart of MO in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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