Altria Remains Neutral

Source from:  Tobacco World 06/27/2012

We recently reaffirmed our neutral recommendation on Altria Group Inc (MO - Analyst Report), a manufacturer and marketer of cigarettes, smokeless products, wine and financial services providers in the U.S. The company reported profit of 49 cents per share in the first quarter of fiscal 2012, which according to the consensus estimate of Sachs, but also surpassed the previous year's result of 11.4%. Raising revenue was the result of long-term premium brand initiatives, Philip Morris USA, as well as high performance and significant increase in market share the company's brand Marlboro. Launching new products in the segment of smokeless product also increased the top line results of the company. Altria has a strong portfolio of brands of tobacco and wine. The portfolio is enriched with popular names such as Marlboro, Virginia Slims, Copenhagen, Skoal, Chateau Ste. Michelle and Columbia Crest. Marlboro continues to provide the company a favorable advantage over their competitors. Marlborough commanded a dominant market share for several years against the backdrop of new innovations in consumer tastes and preferences. Marlboro black and soft and the recently established Black Marlboro menthol and menthol with no grades occupy a large portion of the market. In addition, the Copenhagen and Skoal brands of smokeless category citation. Copenhagen decided on the new segments, starting Wintergreen elongated neck, the natural grade. In addition, the company's new collaboration with windows A / S, a pharmaceutical company engaged in the development of research and production of nicotine gum with additional features in other products and technologies, the development of innovative, non-combustible nicotine-containing products for adult tobacco users indicated the company's ability to properly assess consumer choice. There was a general shift of consumers with low risk and smokeless tobacco products. The new company will allow the company's market share in this industry. Nonetheless, governments around the world impose restrictions on tobacco companies to keep smokers. This, in turn, further dragging the consumption of cigarettes in the world. U.S. Food and Drug Administration (FDA) have decided that the tobacco companies will make use of stringent warning labels on cigarette packages to turn customers from smoking. Government measures that prohibit the use of tobacco products, along with a decrease in public recognition of smoking will affect the amount of companies in many markets, go ahead In addition, FDA also proposed a ban on menthol in accordance with the Tobacco Control Act, which essentially said that menthol cigarettes have adverse effects on human health and the elimination of menthol would be useful. FDA is currently reviewing the recommendations, among many other factors, including the unintended consequences of the ban menthol. As a result of this regulation, the company's costs increased in an effort to meet the requirements of the FDA. Moreover, such a ban would lead to black marketing, which would be extremely detrimental to all parties. Enditem