Kaufman downgraded the stock to Underweight in early June. Her prior Underweight thesis was based on how rising macroeconomic uncertainty could pressure cigarette sale volumes, in addition to the company’s limited exposure to reduced-risk products. Reduced-risk products are tobacco alternatives that pose fewer health risks to smokers. Altria was betting big on Juul Labs’ vape products, but that strategy hit a snag this week after the Food and Drug Administration banned all of Juul’s products from the U.S. market.
While Kaufman is still cautious about Altria’s fundamentals given the challenges the company is facing, she believes the market is “more appropriately pricing in our concerns.”
Of the 19 analysts covering the stock surveyed by FactSet, 32% rate it a Buy while 68% rate it a Hold.
Altria Shakes Off a Sell Rating and Gets an Upgrade
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Rising macroeconomic uncertainty contributed to a downgrade of Altria’s stock in early June.
Fabrice Coffrini/AFP via Getty Images
Altria Group
stock was rising Friday after the tobacco manufacturer received an upgrade from Morgan Stanley.
Analyst Pamela Kaufman upgraded shares of
Altria
(ticker: MO) to Equal-Weight from Underweight on Friday. She also trimmed her price target to $43 from $47.
The stock rose 3% to $43.77 on Friday. The shares have fallen nearly 20% this month, but it’s this underperformance that led to Kaufman’s upgrade.
“MO has materially underperformed the S&P 500 (by 13% June to date) and we now see a balanced risk-reward,” she wrote in a research note on Friday.
The
S&P 500
was down 3.7% during the same period.
Kaufman downgraded the stock to Underweight in early June. Her prior Underweight thesis was based on how rising macroeconomic uncertainty could pressure cigarette sale volumes, in addition to the company’s limited exposure to reduced-risk products. Reduced-risk products are tobacco alternatives that pose fewer health risks to smokers. Altria was betting big on Juul Labs’ vape products, but that strategy hit a snag this week after the Food and Drug Administration banned all of Juul’s products from the U.S. market.
While Kaufman is still cautious about Altria’s fundamentals given the challenges the company is facing, she believes the market is “more appropriately pricing in our concerns.”
Of the 19 analysts covering the stock surveyed by FactSet, 32% rate it a Buy while 68% rate it a Hold.
Write to Sabrina Escobar at [email protected]
Source: https://www.barrons.com/articles/altria-stock-upgrade-mo-51656076780?siteid=yhoof2&yptr=yahoo