Group 1: Company Performance - Imperial Tobacco Group PLC (IMBBY) has gained approximately 22.2% year-to-date, significantly outperforming the average return of 4.7% for the Consumer Staples sector [4] - The Zacks Consensus Estimate for IMBBY's full-year earnings has increased by 1% over the past three months, indicating improved analyst sentiment and a stronger earnings outlook [3] - In comparison to its industry, Imperial Tobacco Group PLC is slightly underperforming, as the Tobacco industry has seen an average gain of 24.7% this year [5] Group 2: Industry Context - The Consumer Staples sector, which includes 177 individual stocks, is currently ranked 8 in the Zacks Sector Rank [2] - The Tobacco industry, which includes Imperial Tobacco Group PLC, consists of 6 companies and is ranked 89 in the Zacks Industry Rank [5] - Nestle SA, another stock in the Consumer Staples sector, has outperformed the sector with a year-to-date return of 27.8% and has a Zacks Rank of 2 (Buy) [4][5]

Core Viewpoint - Philip Morris International Inc. is expected to show growth in both revenue and earnings for the first quarter of 2025, with revenue estimates around $9 billion, reflecting a 1.8% increase year-over-year [1]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for quarterly earnings is $1.61 per share, indicating a 7.3% increase from the previous year [2]. - The company has a trailing four-quarter earnings surprise average of 4% [2]. Smoke-Free Product Performance - Smoke-free products contributed 40% to the company's net revenues in Q4 2024, showcasing the success of its IQOS device and other innovations like IQOS ILUMA, ZYN nicotine pouches, and VEEV ONE e-vapor [3]. - The estimated revenue from smoke-free products for Q1 2025 is $3,576.89 million, up from $3,296 million in the same quarter last year [4]. Cost Management and Strategic Initiatives - Philip Morris has implemented cost-saving measures and strategic initiatives that have positively impacted its margins [4]. Currency Impact and Regulatory Challenges - The company anticipates a 4-cent unfavorable impact on adjusted EPS due to volatile currency movements [5]. - Strict government regulations, including mandatory precautionary labels and self-critical advertisements, are challenges that may affect cigarette consumption [5]. Earnings Prediction Model - The current model does not predict a definitive earnings beat for Philip Morris, with a Zacks Rank of 3 and an Earnings ESP of -1.83% [6].

In its upcoming report, Philip Morris (PM) is predicted by Wall Street analysts to post quarterly earnings of $1.61 per share, reflecting an increase of 7.3% compared to the same period last year. Revenues are forecasted to be $8.95 billion, representing a year-over-year increase of 1.8%.The consensus EPS estimate for the quarter has undergone an upward revision of 2.2% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial ...

Core Insights - The Zacks Tobacco industry is transitioning towards smoke-free alternatives due to increasing consumer health awareness and stricter regulations on traditional cigarettes [1][5][6] - Major companies like Philip Morris International, Altria Group, and Turning Point Brands are heavily investing in reduced-risk products (RRPs) to leverage this trend [1][6] Industry Overview - The Zacks Tobacco industry encompasses companies that manufacture and sell cigarettes, cigars, snuffs, and nicotine-based products, including RRPs like e-cigarettes and vaping products [3] - Products in this industry are regulated by the U.S. Food and Drug Administration, which enforces permissible nicotine levels [4] Trends Impacting the Industry - There is a rising demand for smoke-free options driven by health concerns and government regulations aimed at reducing cigarette consumption [5] - Tobacco companies are focusing on innovations to enhance user experience and energy efficiency in RRPs, leading to significant revenue growth [6] Pricing Power and Sales Challenges - Tobacco companies maintain strong pricing power, allowing them to implement price increases despite declining cigarette sales volumes [7] - The industry faces challenges from inflation and regulatory restrictions, which are impacting cigarette sales and consumer behavior [8][9] Industry Performance - The Zacks Tobacco industry has outperformed the broader market, gaining 61.1% over the past year compared to the S&P 500's growth of 6.2% [13] - The industry is currently trading at a forward P/E of 14.37X, lower than the S&P 500's 19.88X [14] Company Highlights - **Philip Morris International**: Transitioning to a smoke-free future with a focus on RRPs like IQOS and ZYN, aiming for a majority smoke-free business by 2030. The Zacks Consensus Estimate for its EPS is $7.18, with shares gaining 76.7% in the past year [15][17][16] - **Altria Group**: Focusing on smoke-free brands like NJOY and on!, while modernizing operations through its "Optimize and Accelerate" initiative. The Zacks Consensus Estimate for its EPS is $5.31, with shares increasing by 40% in the past year [18][19] - **Turning Point Brands**: Experiencing growth through its core brands and modern oral nicotine products, with a Zacks Consensus Estimate for its EPS at $3.42 and shares soaring 115.8% in the past year [20][22]

Core Viewpoint - Altria (NYSE: MO) has demonstrated exceptional long-term performance, with a single dollar invested in 1968 growing to $6,638, representing a return of 663,700% or over 20% annually when dividends are reinvested [1] Group 1: Investment Strategy - Value dividend investing is highlighted as an effective investment strategy, allowing investors to acquire quality companies at attractive prices while generating cash flow without the need to sell stock positions [1] - The focus is on building a portfolio of dividend growth stocks to achieve financial independence through dividend income [1]

Core Viewpoint - Philip Morris is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The upcoming earnings report is expected to be released on April 23, with a consensus EPS estimate of $1.61, reflecting a +7.3% change year-over-year. Revenues are projected to be $8.95 billion, up 1.8% from the previous year [3][2]. Estimate Revisions - The consensus EPS estimate has been revised 0.92% higher in the last 30 days, indicating a collective reassessment by analysts [4]. However, the Most Accurate Estimate is lower than the consensus, resulting in an Earnings ESP of -1.83%, suggesting a bearish outlook on the company's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank of 1, 2, or 3. Stocks with this combination have a nearly 70% success rate for positive surprises [8]. However, a negative Earnings ESP does not necessarily indicate an earnings miss [9]. Historical Performance - Philip Morris has a history of beating consensus EPS estimates, having done so in the last four quarters. In the most recent quarter, the company reported earnings of $1.55 per share against an expectation of $1.51, resulting in a surprise of +2.65% [12][13]. Conclusion - While Philip Morris does not currently appear to be a compelling candidate for an earnings beat, investors should consider other factors when making investment decisions ahead of the earnings release [16].

Core Insights - The Zacks Tobacco industry is transitioning towards smoke-free alternatives due to increasing consumer health awareness and stricter regulations on traditional cigarettes [1][4] - Major companies like Philip Morris International, Altria Group, and Turning Point Brands are heavily investing in reduced-risk products (RRPs) to leverage this trend [1][4] Industry Overview - The Zacks Tobacco industry encompasses companies that manufacture and sell cigarettes, cigars, snuffs, and nicotine-based products, including RRPs like e-cigarettes and heat-not-burn products [3] - Products are sold through various retail channels and are subject to strict regulations by the U.S. Food and Drug Administration [3] Trends Impacting the Industry - The demand for smoke-free options is rising, driven by health concerns and government regulations aimed at reducing cigarette consumption [4] - Tobacco companies are focusing on innovations in RRPs to enhance user experience and energy efficiency, leading to significant revenue growth in this segment [4] Pricing Power - Tobacco companies maintain strong pricing power, allowing them to implement price increases despite declining cigarette sales volumes [5] - The addictive nature of cigarettes results in consumer loyalty, making them less sensitive to price hikes [5] Challenges - The industry faces challenges in cigarette sales volumes due to inflation and changing consumer behavior towards smoke-free alternatives [6] - Regulatory restrictions on sales and advertising further impact traditional cigarette sales [6] Industry Performance - The Zacks Tobacco industry ranks 90, placing it in the top 36% of over 250 Zacks industries, indicating positive near-term prospects [7][8] - The industry has outperformed the broader market, gaining 61.1% over the past year compared to 6.2% for the broader sector and 8.1% for the S&P 500 [10] Valuation - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 14.37X, lower than the S&P 500's 19.88X and the sector's 17.66X [13] Company Highlights - **Philip Morris International**: Transitioning to a smoke-free future with a focus on RRPs like IQOS and ZYN, aiming for a majority smoke-free business by 2030; shares have gained 76.7% in the past year [16][17] - **Altria Group**: Focusing on smoke-free brands and modernizing operations through its "Optimize and Accelerate" initiative; shares have surged 40% in the past year [19] - **Turning Point Brands**: Experiencing growth through core brands and modern oral nicotine products; shares have skyrocketed 115.8% in the past year [22][23]

That's part of the reason Altria is attractive in April, as Wall Street hits some turbulence. And it is why the company will continue to be attractive if that turbulence spills over onto Main Street, perhaps precipitating a recession. In fact, during difficult times, cigarette smokers often smoke more. The 7% yield gets you almost there Altria (MO 0.79%) is a hard stock to love, even if you are a dividend investor. And it probably isn't the type of company you'll want to own for the rest of your life. But a ...

Core Viewpoint - Consumer staples companies, such as Coca-Cola, are considered safe haven investments during economic downturns due to consistent demand for their products, which are often necessities or frequently purchased items [2][4]. Group 1: Coca-Cola - Coca-Cola is recognized for its strong brand and has maintained a dividend yield of 2.9%, having increased its dividend for over 50 years, earning it the title of Dividend King [5]. - The stock is currently viewed as somewhat expensive, with price-to-sales and price-to-earnings ratios above their five-year averages [5]. Group 2: PepsiCo - PepsiCo, also a Dividend King, offers a diversified portfolio that includes snacks and packaged foods, with a higher dividend yield of 3.7% [6]. - The company’s valuation is attractive, with both price-to-sales and price-to-earnings ratios below their five-year averages, and it continues to invest in growth through acquisitions [6]. Group 3: Unilever - Unilever presents a more adventurous option with a portfolio that includes consumer products and food, generating around 40% of its revenue from North America and Europe, while the rest comes from faster-growing markets in Latin America and Asia [7]. - The company offers a dividend yield of 3.1%, making it an appealing choice for investors seeking growth [7]. Group 4: Tobacco Companies - Altria and British American Tobacco are high-yield options, with dividend yields of 7.2% and 7.5% respectively, despite facing long-term volume decline in cigarette sales [8][9]. - These companies have shown resilience during uncertain times, as smokers tend to remain loyal and may increase consumption during economic stress [8]. Group 5: Overall Consumer Staples Sector - The consumer staples sector offers a variety of investment options that can provide stability and reliable dividends during market volatility [10][11]. - Companies like Coca-Cola, PepsiCo, Unilever, Altria, and British American Tobacco are highlighted as solid choices for investors concerned about market conditions [11].

Core Viewpoint - Altria Group (NYSE: MO) is considered a strong investment choice for uncertain market conditions, with a focus on its resilience and dividend-generating capabilities [1]. Company Insights - Altria is currently the largest holding in the consumer products portfolio, indicating confidence in its stability during market fluctuations [1]. - The company is positioned well for dividend investing, which is highlighted as a key strategy for achieving financial freedom [1]. Investment Strategy - The article emphasizes the importance of dividend investing as a straightforward and accessible method for building long-term wealth [1]. - The author shares insights from extensive experience in M&A and business valuation, which supports the analysis of Altria's financial health and investment potential [1].