Altria Group: Hold Rating Due to Strong Performance and Challenges in Smoke-Free Transition

Gerald Pascarelli, an analyst from Needham, has initiated a new Hold rating on Altria Group (MO).

Gerald Pascarelli has given his Hold rating due to a combination of factors including Altria Group’s strong operational performance and shareholder returns, which are attractive. However, the company’s heavy reliance on smokeable products poses a challenge for transitioning towards a smoke-free business model. While there is optimism around the growth potential of On!, it remains a small portion of the business and is insufficient to counterbalance the declining volumes in other traditional brands.
Additionally, although there are pending market authorizations for On! Plus and Ploom that could act as future growth catalysts, and potential regulatory actions against the illicit e-vapor market, the current valuation of Altria Group appears to be fully priced. The stock’s valuation is above historical averages, making it difficult to justify a more favorable rating at this time.

According to TipRanks, Pascarelli is an analyst with an average return of -1.9% and a 45.83% success rate. Pascarelli covers the Consumer Defensive sector, focusing on stocks such as Celsius Holdings, Molson Coors, and Boston Beer.