Wells Fargo Starts Altria (MO) at Market Perform; Has Marlboro Reached Its Peak In The United States?

Wells Fargo initiates coverage on Altria (NYSE: MO) with a Market Perform. Valuation range $26-28.

Wells analyst says, "Altria Group is an impressive company, in our view, with
leading positions in both the cigarette and smokeless category. However, we are cautious on the name given some recent trends of retail market share slowdown for Marlboro. Therefore, we have some concerns that Marlboro has reached its peak and we would like to have more comfort that MO can reverse this trend and increase Marlboro’s retail share profitably. In terms of its smokeless tobacco business, overall we believe it is positive that MO is now strongly positioned in the smokeless category since its acquisition of UST, though for a hefty price tag. Overall, we believe MO is in a period of transition and given the company’s strong, leading portfolio of brands, coupled with its tremendous knowledge of the tobacco industry, we are optimistic the company will be able to enter a period of sustainable growth and improving margin in the next couple of years."

For more ratings news on Altria click here and for the rating history of Altria click here.

Shares of Altria closed at $27.06 yesterday.

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