Altria Group Inc’s (NYSE:MO) earnings are predicted to shrink by a high double-digit rate of -50.87% over the next three years. Presently, with an EPS of $8.027, we can expect an upcoming EPS of $3.944. To determine whether this negative growth rate expectation is justified, we should take a look at how the company has been performing in the past. View our latest analysis for Altria Group
How is Altria Group going to perform in the future?
The bad news for investors of MO is that a drop in earnings is on the cards. Analysts covering the company are expecting the EPS to drop down to $3.944, a significant decline from previous levels of around $8.027. In the same period revenue is predicted to increase from $19,513M to $22,166M and profit is predicted to be slashed from $15,507M to $7,619M in the next couple of years. But, at this level of revenue and earnings, margins are expected to be extremely healthy.
Basis for the contraction
The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is relatively justified or whether the negative sentiment is too pessimistic. MO is expected to face a significant change from a previous double-digit growth of 114.56%, over the last five years, to a forecast double-digit decline by analysts. This is highly bearish and may be a sign of an investment period for MO, incurring higher expense growth than revenue.
For MO, I’ve compiled three essential factors you should further examine:
1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
2. Valuation: What is MO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MO is currently mispriced by the market.
3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of MO? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.