MO - Embedded Expectations Analysis - 2018 09 04
Altria Group, Inc. (MO:USA) currently trades below recent averages relative to UAFRS-based (Uniform) Earnings, with a 14.8x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about Nu Mark and MarkTen, Marlboro and their investments in the core tobacco businessSpecifically, management may be concerned about continuing share declines in branded discount due to weak performance in L&M, and about the sustainability of their dividend payments. Moreover, they may lack confidence in the sustainability of OCI margin expansion, and they may be concerned about the value of investments made to support long-term objectives. Additionally, they might be exaggerating the success of distribution of the MarkTen Bold and Elite units at the retail level, and may be concerned about their ability to drive higher customer traction, and to sustain strong Nu Mark volume growth
Altria Group is a holding company. The company's subsidiaries include: Philip Morris USA Inc., which is engaged in the manufacture and sale of cigarettes; John Middleton Co., which is engaged in the manufacture and sale of machine-made cigars and pipe tobacco; Sherman Group Holdings, LLC and its subsidiaries, which are engaged in the manufacture and sale of cigarettes and the sale of cigars; and UST LLC, which through its subsidiaries, including U.S. Smokeless Tobacco Company LLC and Ste. Michelle Wine Estates Ltd., is engaged in the manufacture and sale of smokeless tobacco products and wine. The products of the company's tobacco subsidiaries include smokeable tobacco products and machine-made cigars.
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