Will Altria Stock Rebound After A 10% Fall In A Month?

MO: Altria Group logo
Altria Group

Altria stock (NYSE: MO) has fallen 10% in a month, underperforming the broader markets, with the S&P500 down 6%. MO stock was recently downgraded by one of the large Wall Street research firms, citing inflation concerns. The rising gas and food prices in the U.S. will likely weigh on consumer demand, impacting cigarette volume. Furthermore, global tobacco company, Phillip Morris, announced its plans to acquire Swedish Match – best known for its oral nicotine products. Although Philip Morris sells its products outside the U.S., Swedish Match generates over 60% of its sales from the U.S. market, implying that this acquisition will put Altria in direct competition with Philip Morris. Note that Philip Morris owns the famous Marlboro brand and Altria has a licensing deal for the U.S. market. These factors above, clubbed with a weakness in the markets owing to rising interest rates and fears of a recession, have weighed on MO stock over the recent weeks.

Now that Altria stock has seen a fall of 10% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of a decline for MO stock over the next month. Of 129 instances in the last ten years that MO stock saw a twenty-one-day fall of 10% or more, 57 resulted in MO stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 57 out of 129, or about a 44% chance of a rise in MO stock over the next month. See our analysis of Altria Stock Chance of Rise for more details.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using the last ten years’ data

  • After moving -12% or more over five days, the stock rose on 71% of the occasions in the next five days.
  • After moving -13% or more over ten days, the stock rose on 54% of the occasions in the next ten days.
  • After moving -10% or more over a twenty-one-day period, the stock rose on 44% of the occasions in the next twenty-one days.
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This pattern suggests a higher chance of a rise in MO stock over the next five days and ten days, but it may see lower levels over the next month.

Altria (MO) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: TPB highest at -4.6%; MO lowest at -12.0%
  • Ten-Day Return: UVV highest at -6.2%; MO lowest at -13.4%
  • Twenty-One Day Return: BTI highest at 2.3%; MO lowest at -9.6%

While MO stock may see lower levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Ecolab vs. Philip Morris.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns Jun 2022
MTD [1]
YTD [1]
Total [2]
 MO Return -13% 0% -30%
 S&P 500 Return 0% -14% 84%
 Trefis Multi-Strategy Portfolio -9% -27% 188%

[1] Month-to-date and year-to-date as of 6/14/2022
[2] Cumulative total returns since the end of 2016

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