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Jan. 17, 2020, 1:11 p.m. EST · CORRECTED

Altria downgraded to sell on concerns about headwind posed by new minimum age for buying tobacco

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By Ciara Linnane

An earlier version of this report erroneously said Altria was a Dow component. It has been corrected.

CFRA downgraded Altria Group Inc. stock /zigman2/quotes/208895754/composite MO -4.55% to sell from hold on Friday and said it expects a change in the minimum age for buying tobacco is a big headwind. Analyst Garrett Nelson lowered his 12-month price target to $44 from $50. "We think recent federal legislation raising the minimum purchase age to 21 for tobacco products presents a significant long-term headwind for MO," Nelson wrote in a note. "According to CDC data, 12.5% of middle school and 31.2% of U.S. high school students reported they were currently use of some form of tobacco product in 2019 (mostly e-cigarettes)." The company may be forced to make more "draconian" cost cuts to support profit, he wrote. The company may also need to write down part of the value of its 35% stake in e-cigarette company Juul, which has become the subject of regulatory and and criminal investigations over allegations it targeted teenagers in advertising. Altria shares were up 0.3% Friday and have gained 8.9% in the last 12 months, while the S&P 500 /zigman2/quotes/210599714/realtime SPX -3.35% has gained 26%.

/zigman2/quotes/208895754/composite
US : U.S.: NYSE
$ 43.80
-2.09 -4.55%
Volume: 18.90M
Feb. 24, 2020 4:10p
P/E Ratio
N/A
Dividend Yield
7.67%
Market Cap
$85.26 billion
Rev. per Employee
$2.36M
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/zigman2/quotes/210599714/realtime
US : S&P US
3,225.89
-111.86 -3.35%
Volume: 2.75B
Feb. 24, 2020 5:04p
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