Shares of tobacco company Altria Group, Inc. (MO) declined 6.2% on Thursday after its third-quarter 2021 earnings fell short of analysts’ estimates.
The Virginia-based company produces and sells cigarettes, smokeless products and wine in the U.S. Its brands include Marlboro, Black & Mild, Copenhagen, Skoal, Red Seal, Husky, Chateau Ste. Michelle and 14 Hands.
Altria reported adjusted earnings of $1.22 per share, lower than the Street’s estimate of $1.26 per share. However, the figure was 2.5% higher than the year-ago quarter.
Even though net revenues fell 4.7% year-over-year to $6.8 billion, the number surpassed analysts’ expectations of $5.74 billion. (See Insiders’ Hot Stocks on TipRanks)
The CEO of Altria, Billy Gifford, said, “Our tobacco businesses performed well against difficult year-over-year comparisons and we’re encouraged by the significant retail share growth from on! in the third quarter. We also continued to reward shareholders with a strong and growing dividend and announced today the expansion of our existing $2.0 billion share repurchase program to $3.5 billion.”
The company expects to complete the expanded program by the end of next year as it has $2.5 billion remaining in the $3.5 billion program.
“We are raising the lower-end of our full-year 2021 guidance and now expect to deliver adjusted diluted EPS in a range of $4.58 to $4.62. This range represents a growth rate of 5% to 6% from a $4.36 base in 2020,” Gifford added.
Furthermore, Altria projects capital expenditures of $150 million to $200 million in 2021, lower than the earlier guidance range of $200 million to $250 million.
Overall, the stock has a Strong Buy consensus rating based on 5 Buys and 1 Hold. The average Altria Group price target of $52.20 implies 17.1% upside potential. Shares have gained nearly 21% over the past year.
According to TipRanks’ Smart Score rating system, Altria scores a 9 out of 10, suggesting that the stock is likely to outperform market averages.