Tags: altria | shares | vaping | tobacco

Argus Analyst: Buy Altria Shares Despite Vaping Crisis

Argus Analyst: Buy Altria Shares Despite Vaping Crisis
(Piotr Trojanowski/Dreamstime)

By    |   Friday, 11 October 2019 01:26 PM

One savvy Wall Street analyst reportedly thinks tobacco giant Altria Group stock is still worth buying now despite heightened awareness of possible health hazards linked to vaping.

Argus analyst David Coleman recently reiterated a “buy” rating and $60 price target on Altria shares, Barron’s explained.

He admits that Altria (MO) is facing plenty of pressure, as headlines highlight the potential health dangers of vaping and the chances increase for restrictions on nicotine levels and flavorings in e-cigarettes.

“Nevertheless, we believe that consumers will continue to view vaping products as a more acceptable nicotine delivery system than traditional cigarettes or chewing tobacco, and that the use of these products will continue to grow despite legislative restrictions,” he wrote.

Altria stock is down more than 12% in 2019, while the S&P 500 has risen 16.5%, Barron’s explained. The company has faced a number of headwinds, including recent vaping-related illnesses that caused investors to question the value of its 35% stake in e-cigarette firm Juul Labs.

Altria stock (MO) was down a bit midday Friday at $42.91.

To be sure,  U.S. health officials are preparing to release new guidance for doctors stressing the need to ask every patient with an apparent respiratory infection about their vaping history, Reuters explained.

The updated guidance will also advise physicians on how to diagnose and manage patients who may have both a lung infection and a vaping injury.

The CDC has already recommended doctors start asking patients about their vaping history during routine visits, but gathering that information is especially important as doctors evaluate patients with respiratory symptoms from infectious causes.

Meanwhile, Juul Labs Inc. has hired the head of regulatory affairs at its part-owner Altria Group Inc to take on a similar role at the e-cigarette maker, amid a regulatory backlash against the growth of teen vaping in the United States.

Joe Murillo is the first big hire by Juul’s new chief executive officer, K.C. Crosthwaite, who himself also recently moved over from Altria.

Altria owns a 35.5% stake in Juul, which last week said it would suspend all advertising in the United States where the Trump administration has announced plans to remove all flavored e-cigarettes from store shelves to rising popularity among teenagers.

The FDA last month warned the company about marketing its products as safer than traditional cigarettes and requested more documents and information within 30 days.

Flavored e-cigarettes represent 80% of Juul’s sales. The company’s had dropped to about $25 billion, from $38 billion when Altria invested in it, according to Morgan Stanley.

Federal prosecutors in California are conducting a criminal probe into Juul, The Wall Street Journal reported last month, though it said the focus of the probe was unclear.

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One savvy Wall Street analyst reportedly thinks tobacco giant Altria Group stock is still worth buying now despite heightened awareness of possible health hazards linked to vaping.
altria, shares, vaping, tobacco
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2019-26-11
Friday, 11 October 2019 01:26 PM
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