Source: Our predictions
Altria (MO) And The Tobacco Industry
To put things succinctly, the cigarette industry is in a tough state. From 2012-2016, cigarette retail volume has taken a sharp plunge despite an increase in retail value. This disparity is in large part due to the passing of both administrative and statutory regulations on the sale, advertisement, and taxing of tobacco products.
Most notable of these regulations being the 2009 Family Smoking Prevention and Tobacco Control Act. According to pending regulations on the FDA’s Federal Register, new regulations by the agency on smokeable and smokeless tobacco products are only expected to increase both in number and severity. We believe this impending threat has led many investors to undervalue MO, as well as other tobacco-product stocks.
