On Halloween, Altria Group (MO 0.05%) released its latest set of quarterly figures. The results weren't scary at all -- in fact, a great many investors found them encouraging, and the cigarette maker's stock saw a decent pop in price.
If one analyst's post-earnings take on the company is accurate, we're in for even more gains before too long.
Firing up a strong quarter
Altria published those quarterly numbers before the market opened on Oct. 31. The following day, Stifel's Matthew Smith added an 11% raise to his price target on the stock. He's now predicting that it will climb to $60 per share, up from his previous level of $54. He maintained his buy recommendation on the shares. The price target implies a 10% increase in the stock price over the next 12 months or so.
Altria beat Smith's per-share earnings estimate, which was basically in line with the analysts' consensus. He said the nearly 8% year-over-year rise in profitability more than compensated for the increased investment into its business. The analyst added that he was confident Altria could achieve its full-year 2024 guidance, particularly on the back of a fresh $600 million cost-savings program.
Secular decline
On the basis of its very reliable high-yield dividend and that recent estimates-beating quarter, Altria should be considered an attractive stock for many investors.
Yet the company's legacy business, physical cigarettes, has seen a pronounced decline in revenue from year to year, and it remains to be seen whether alternatives like vaping products can offset this to a meaningful degree. So far, management has proven adept at coping with these challenges, suggesting that perhaps Smith's continued optimism is justified.
