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Morgan Stanley update on Altria Group (NYSE:MOAfter a meeting with management, he highlighted the company’s investments in its position.To capitalize on changing consumer preferences for nicotine consumption
Altria (MO), despite being aware of the uncertainties of rising mobility, inflation, and higher gas prices, believes these headwinds can be mitigated by rising wages among lower-income consumers and its data-driven pricing strategies.
Following the meeting, Morgan Stanley maintained an Equal Weight rating for MO.
Analyst Pamela Kaufman: “We believe MO offers relative safety in the current volatile market context due to the company’s strong cashflow generation, defensive nature and US-focused business. We remain EW because we see several headwinds that could impact the company’s fundamental outlook. These include lower cigarette volumes due to higher gas prices/increasing mobility, and increased competition from deep discount cigarette segments that can lead to price pressure. These concerns are supported in MO’s 7.0% dividend yield and valuation at 8.5×2023 EV/EBITDA.
Altria (MO), was given a price target of $51 compared to the 52-week trading range between $42.53 and $53.96.