Altria Group Inc. (NYSE:MO)

Price to Earnings (P/E) Ratio

The P/E ratio data begins in the fourth quarter of 2019, showing an exceptionally high value of 91.35, which then sharply declines to 18.14 by the first quarter of 2020. Following this significant drop, the ratio stabilizes around the high teens to mid-20s through 2021 and early 2022. From mid-2022 onwards, there is a notable downward trend in the P/E ratio, reaching as low as 7.93 by the first quarter of 2023. After this low, the ratio exhibits a modest fluctuation but remains within a relatively low range, between 7.93 and 11.76, through the first quarter of 2024. This suggests a substantial devaluation in the company's earnings multiple over recent years.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio is first recorded in the first quarter of 2019 at 7.65 and shows a relatively stable pattern with minor fluctuations over the entire period. It peaks at 8.5 in the second quarter of 2022, indicating a higher valuation relative to operating profit at that time. Following this peak, it declines to around 6.0 in the second quarter of 2023, indicating a lower market valuation compared to the company's operating profit. Towards the end of the reporting period, the ratio again increases, reaching 8.27 by the third quarter of 2024. Overall, the P/OP ratio reflects moderate volatility but tends to hover around the 6 to 8.5 range.

Price to Sales (P/S) Ratio

The P/S ratio demonstrates a persistent oscillation within a narrow band of approximately 2.5 to 3.9 throughout the observed period. Starting at 3.14 in the first quarter of 2019, it decreases slightly to a low near 2.59 by the fourth quarter of 2019. Afterward, it gradually increases to peak at 3.86 in mid-2022. Subsequently, the ratio shows some variability but remains within the range of 2.82 to 3.84, with a rising trend towards the end of the period under review. The pattern indicates a relatively stable valuation of the company's sales with some susceptibility to market changes.

Price to Book Value (P/BV) Ratio

Data for the P/BV ratio is only available for the early quarters, from the first quarter of 2019 to the second quarter of 2021. The ratio begins at 6.83 and fluctuates considerably, increasing to 12.69 by the fourth quarter of 2019 and peaking at 29.61 in the first quarter of 2021. This sharp upward trend in the P/BV ratio signifies a growing market premium relative to the book value during this timeframe. No further data is available beyond early 2021, preventing analysis of recent trends.

Overall Insights

The financial ratios reveal significant shifts in market perceptions of the company over the years. Notably, the sharp decline in the P/E ratio after 2019 and its sustained lower levels in recent years may indicate changes in earnings performance or investor sentiment. The P/OP ratio shows moderate volatility but stays within a consistent range, suggesting relatively stable valuations of operational profitability. The P/S ratio remains somewhat steady, reflecting consistent valuation of revenues. The P/BV ratio exhibits a pronounced increase in earlier years, implying a growing premium on net asset value, although more recent data is lacking. These patterns collectively suggest evolving investor assessments with periods of revaluation and stabilization in the company’s market metrics.

Share Price Trend

The share price exhibited a general decline from March 2019, beginning at $51.41, to reach a low point near the end of 2020, notably dropping to $36.08 in September 2020. Following this decline, the share price experienced a recovery phase throughout 2021 and into early 2022, peaking at $55.20 in March 2022. Subsequent months until mid-2023 showed volatility with a downward tendency, dropping to a low of $39.26 in September 2023. More recently, the price recovered again towards the second half of 2024, reaching $54.46 by the end of the observed period, indicating a renewed positive market sentiment.

Earnings Per Share (EPS) Development

Available EPS data beginning in the first quarter of 2020 reveals an initial period of negative earnings, with values of -$0.70, -$0.46, and -$0.49 over the first three quarters of 2020. A turnaround occurred in the fourth quarter of 2020 with positive EPS of $0.39. From 2021 onwards, EPS generally trended upwards, with some fluctuations. Notable increases occurred reaching $2.40 in Q1 2021, steadily rising to $4.95 in Q1 2023. The period from 2023 to mid-2024 saw continued growth with EPS peaking at $6.07 in September 2024, signaling strong profitability improvement over time.

Price-to-Earnings (P/E) Ratio Analysis

The P/E ratio data starting from the fourth quarter of 2020 showcases initially elevated valuation multiples, peaking at 91.35 in that quarter, likely reflecting the market adjusting to the recent positive earnings after prior losses. Subsequently, the P/E ratio normalized into the teens and twenties range during 2021 and 2022, indicating a stabilizing valuation in line with earnings growth. However, there exists notable volatility with the ratio reaching highs of 45.23 and lows near 7.93 in different quarters. The downward trend in the P/E ratio in 2023 and 2024, with values mostly under 10, reflects either strong EPS growth outpacing share price increases or a moderated market valuation relative to earnings.

Overall Financial Trends

The data reveals a significant recovery and growth in earnings per share following a period of losses in early 2020. Correspondingly, the share price volatility appears linked to earnings movements, with substantial price recovery after initial declines. The P/E ratio adjustments mirror market revaluation phases, initially elevated during earnings recovery, then stabilizing towards lower, more sustainable levels consistent with improved and rising profitability. This overall pattern suggests a company that overcame early earnings challenges, achieved strong profitability gains, and experienced market adjustments reflecting these operational improvements.

Share Price Trend

The share price exhibited a declining trend from March 2019, starting at $51.41 and reaching a low of $36.08 in September 2020. It subsequently recovered and peaked at $55.2 in March 2022, followed by a fluctuating downward trajectory to $39.26 by September 2023. Recent data indicate a rebound, with the share price rising again to $54.46 in September 2024.

Operating Profit Per Share Trend

Operating profit per share data is available from March 2020 onward, showing a generally steady increase from $5.56 to $6.68 by December 2022. Thereafter, the values fluctuate within a narrow range between $6.50 and $6.67. The most recent figures reveal slight variations but no significant upward or downward trend, indicating relative stability in profitability per share in the last observed period.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio demonstrates notable volatility. Initially, it declines from 7.65 in March 2020 to a low of 6.00 in June 2023, suggesting the share price decreased relative to operating profit per share over this period. After this trough, the ratio rises sharply to 8.27 in September 2024, reflecting an increase in share price or a relative valuation premium compared to operating profit. This fluctuation illustrates changing market sentiment and valuation approaches during the period.

Overall Insights

The financial data indicate an initial period of share price decline followed by recovery and volatility through 2024. Operating profit per share shows a positive growth trend initially and stabilizes in more recent quarters. The P/OP ratio's movement highlights varying market valuation conditions, with periods of both undervaluation and premium pricing relative to operating profit. Together, these trends suggest a dynamic market environment with oscillating investor confidence and consistent underlying profitability.

The analysis of the quarterly financial data reveals several notable trends in share price, sales per share, and price-to-sales (P/S) ratio over the observed periods.

Share Price

The share price exhibited a general downward trend from early 2019 until late 2020, falling from approximately $51.41 in March 2019 to a low point around $36.08-41.58 in the mid to late 2020 period. Starting late 2020, the share price began a recovery trend, reaching approximately $51.48 by the end of 2021. However, this recovery was followed by a period of volatility and decline in 2022 and 2023, where the share price fluctuated between roughly $44 and $39, before showing a renewed upward movement in 2024, ending near $54.46 by September 2024. This pattern suggests cyclical investor sentiment or external factors influencing the stock's valuation.

Sales Per Share

Sales per share data became available from March 2020 onward, showing relatively stable values ranging from approximately $13.51 to $14.32 across the entire timeframe. Minor fluctuations occurred, but no significant upward or downward trend can be discerned. The sales per share hovered just above $14 for most of the duration, indicating consistent revenue generation on a per-share basis.

Price-to-Sales (P/S) Ratio

The P/S ratio showed significant variation over the period. Initially, it declined from 3.14 in March 2020 to a low of 2.59 in December 2020, reflecting a reduction in market valuation relative to sales at that time. Afterward, the P/S ratio increased steadily, peaking around 3.86 in June 2022. Subsequently, there was a modest decline and fluctuation between 3.1 and 3.38 through late 2022 and 2023, followed by a marked rise toward 3.84 in the third quarter of 2024. This indicates shifts in market sentiment or investor expectations with respect to the company’s sales performance, and possibly valuation changes relative to competitors or market conditions.

Share Price Trend

The share price exhibited a downward trend from March 2019 through the first quarter of 2020, declining from $51.41 to $39.25. A partial recovery followed in the remainder of 2020 and early 2021, with the price rising to approximately $51.48 by December 2021. Subsequently, the price fluctuated but showed a general decline in 2022, reaching lower points around $44. Notably, in 2023 and early 2024, the share price showed renewed upward momentum, with values rising from approximately $39.26 in September 2023 up to $54.46 by September 2024.

Book Value per Share (BVPS) Dynamics

The book value per share demonstrated a consistent deteriorating pattern over the analyzed periods. From a positive $7.53 in March 2019, the BVPS sharply decreased to near zero by the end of 2019 and entered negative territory from the third quarter of 2021 onward. The negative trend intensified, reaching values below -2 in late 2022 and persisting near this level through Q3 2024. This persistent negative book value per share suggests a depletion of net asset value on a per-share basis during the timeframe.

Price to Book Value Ratio (P/BV)

The price-to-book ratio was high and generally increasing through Q4 2020, reaching a peak of 28.54 at that time. By early 2021, it remained elevated around 27-30. Data beyond the first quarter of 2021 is not provided, but earlier trends imply significant disparity between market valuations and book value, driven in part by the deterioration of book value per share. The high P/BV ratios reflect strong investor prices relative to the declining book value, indicative of market optimism or other valuation considerations despite negative BVPS.

General Observations

The juxtaposition of declining book value per share with fluctuating but often recovering share prices suggests market valuation may be influenced by factors other than tangible book value alone. The recovery in share price throughout 2023 and 2024, despite persistent negative book value, could reflect improved market sentiment, expected future earnings, or other strategic factors. The absence of more recent P/BV ratios limits comprehensive interpretation of valuation multiples in the latest periods.