BofA analysts recommend buying shares of Altria Group
2023.01.19 13:08
BofA analysts recommend buying shares of Altria Group
By Kristina Sobol
Budrigannews.com – Group Altria (NYSE:) on Thursday, analysts at BofA reiterated their Buy rating and $49 price target for the stock.
The analysts explained that Philip Morris (NYSE:) of Altria became effective on January 22. Following price increases of +15 cents in October 2022, July 2022, April 2022, and December 2021, the USA division has announced a list price increase of 15 cents for each pack of Marlboro. This is the division’s first price increase since 2023.
“Marlboro’s list price increased by 10% compared to a year ago, driven by management’s desire to maintain profitability goals.” Additionally, “in MO’s most recent round of price increases, per pack prices for Benson & Hedges, Merit, Nat’s, Parliament, and Virginia Slims have been raised by 20 cents per pack,” the analysts stated.
They added that British American Tobacco’s (NYSE:) price increases are more restrained than Altria’s. recent changes in U.S. cigarette pricing.
“We anticipate these more frequent pricing actions at a time of elevated inflation to drive combustible tobacco users to lower priced nicotine alternatives (oral, vapor, and deep discount cigarettes) despite continued employment and wage growth for lower income consumers,” the analysts wrote. “
While nicotine is an addictive product, we anticipate these more frequent pricing actions.” As of 3Q22, we would also like to point out that the price gap between Marlboro and the least effective brand has increased to nearly 40% (39.8%), a level not seen since 2009.”
Altria has a “long history of adapting to changes in the U.S. nicotine landscape,” according to the analysts, and they anticipate this trend to continue. During the session on Thursday, the shares of the company have gained 1%.
