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Altria Points to Smoke-Free Products as Growth Catalysts

Investor Day events are often a great way to show off new ideas and products for a company. Altria (NYSE:MO) did just that with its most recent Investor Day, held on Thursday. While Altria may have made its name through cigarettes—it used to be Philip Morris, after all—it’s branched out since then and may be about to branch out even further. Investors, meanwhile, didn’t react strongly but reacted positively, sending Altria up slightly in Friday afternoon trading.

Of course, Altria showed off some tobacco products. A heated-capsule product is on tap that will create a similar effect to a cigarette. Further, a new wet-tobacco product is also in the works. Altria also described offerings that weren’t built around tobacco but instead around cannabis and even caffeine. These “smoke-free” products are potentially able to double revenue growth in the smoke-free segment.

Altria has some ambitious goals going forward. It wants to grow the total U.S. smoke-free segment by 35% at a minimum, and it also wants to get its net revenue on smoke-free products up to $5 billion by 2028.

However, analysts are a bit skeptical. Currently, analyst consensus calls Altria stock a Hold based on two Buy recommendations, along with four Holds and one Sell. Altria stock also offers modest upside potential, with the average price target of $47.42 per share implying a gain of 7.91%.


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