Devin, thank you for the sober analysis and the great graphs!
Where I think company’s critics have a point is the deceleration of adj EPS growth. By my calculations, from 2009 to 2022, Altria grew adj EPS by 7-8% annually. That has slowed down to 2% in 2023 and, according to their guidance, also 2% in 2024. If these trends don’t reverse, we are looking at a very different company than the one from the 2010’s.
I’d be curious to hear your thoughts on the BAT - PMI global patent dispute settlement.
I'll be sure to touch on the BAT - PMI settlement in coming pieces.
There is no question that EPS growth has decelerated for Altria. However, I hold the opinion that the company has done a fairly strong job in growing FCF despite a number of sizable missteps regarding reinvestment and added pressures. I have never attempted to paint a terribly rosy picture regarding my previous valuation models and growth has largely remained in-line with expectations I've previously laid out. I think there are a number of scenarios in which regulatory and competitive dynamics net Altria a much more favorable future than what is broadly expressed by the market. Conversely, many of the other scenarios in which Altria becomes more challenged can also ultimately benefit other majors - thus I remain content in my approach to holding a basket of names.
Devin, thank you for the sober analysis and the great graphs!
Where I think company’s critics have a point is the deceleration of adj EPS growth. By my calculations, from 2009 to 2022, Altria grew adj EPS by 7-8% annually. That has slowed down to 2% in 2023 and, according to their guidance, also 2% in 2024. If these trends don’t reverse, we are looking at a very different company than the one from the 2010’s.
I’d be curious to hear your thoughts on the BAT - PMI global patent dispute settlement.
I'll be sure to touch on the BAT - PMI settlement in coming pieces.
There is no question that EPS growth has decelerated for Altria. However, I hold the opinion that the company has done a fairly strong job in growing FCF despite a number of sizable missteps regarding reinvestment and added pressures. I have never attempted to paint a terribly rosy picture regarding my previous valuation models and growth has largely remained in-line with expectations I've previously laid out. I think there are a number of scenarios in which regulatory and competitive dynamics net Altria a much more favorable future than what is broadly expressed by the market. Conversely, many of the other scenarios in which Altria becomes more challenged can also ultimately benefit other majors - thus I remain content in my approach to holding a basket of names.
Another solid write-up, Devin. Thank you, as always!
Thank you, John. I greatly appreciate you reading and the support you give.