Here's Why Altria (MO) is a Strong Growth Stock

The article details Zacks Premium's investment methodology, emphasizing the synergy between its proprietary Zacks Rank, which has seen #1 (Strong Buy) stocks average +23.62% annual returns since 1988, and complementary Style Scores (Value, Growth, Momentum, VGM). Optimal stock selection is achieved by targeting Zacks Rank #1 or #2 stocks with A or B Style Scores. For instance, Altria (MO) is highlighted as a Zacks Rank #3 (Hold) with a B VGM and Growth Score, supported by its strategic shift to smokeless products, a 4.9% forecasted earnings growth, and recent upward analyst estimate revisions.

Analysis

Altria Group (MO) is in the midst of a strategic pivot from traditional cigarettes to smokeless categories, driven by regulatory pressures and evolving consumer health preferences. This transition is showing positive signs, with revenues from the oral product category reported to be steadily rising. While the stock carries a neutral Zacks Rank of #3 (Hold), its underlying metrics suggest potential. It has earned a 'B' for both its overall VGM Score and its specific Growth Style Score, underpinned by a forecasted 4.9% year-over-year earnings growth for the current fiscal year. Analyst sentiment for fiscal 2025 is also constructive, evidenced by two upward earnings estimate revisions over the past 60 days, which have increased the consensus estimate to $5.37 per share. Historically, the company has demonstrated consistency by delivering an average positive earnings surprise of 1.3%.

Key Decisions for Investors

• Given its 'B' Growth Score and 4.9% forecasted EPS growth, investors with a growth-oriented mandate should evaluate Altria's potential as its strategic shift to smokeless products gains traction.
• The #3 (Hold) rating indicates a lack of strong, immediate upward momentum in earnings estimates, suggesting investors should temper expectations for short-term outperformance and consider the stock for a stable, longer-term holding.
• It is critical to monitor the revenue growth trajectory of the oral products division in subsequent earnings reports and track any further analyst estimate revisions to validate the ongoing growth thesis.