The CDC’s finding that the deaths linked to e-vaping are due to the grey market puts an end to the downtrend in Altria (NYSE:MO) stock. Even though MO stock erased the Sep – Oct losses, the stock’s ~7% dividend yield gives income investors consistent returns. There are a number of reasons that Altria stock will rise.
As the cannabis market stabilizes, Cronos (NASDAQ:CRON) stock may stop falling. Altria owns 45% of the company. So, this takes away another reason to sell Altria stock. Its ownership in Juul may lead to big goodwill writedowns.
Despite the regulatory hurdles Juul faces, the company is pushing its growth objectives globally. It plans to enter new markets. If it establishes a market in Europe, the Middle East, Africa, Asia, and South America, the growth in e-cigarettes will re-accelerate.
Altria reported revenue growing 2.27% even though cigarette smoking is falling. As the FDA provides further guidance on the e-vaping category, the improving clarity will help Altria develop its flavored product lineup.
Despite the improving outlook, Altria wrote down $4.5 billion in its Juul investment in the third quarter. Now that it is planning for more time to achieve strong margin performance in Juul, investors have lowered expectations. And if new leadership change works out, the unit may reward investors with upside results.
