Altria Group backs long-term adjusted EPS growth at 7%-9% annual rate
In comments being presented at CAGNY, Altria said its long-term financial goals remain: to grow adjusted diluted earnings per share at an average annual rate of 7% to 9%; and to maintain a dividend payout ratio target of approximately 80% of adjusted diluted EPS. Says that during 2018, the company concluded that JUUL "had not only become the retail share leader in the U.S. e-vapor category, but that no other brand was close to it in share or future growth potential." Says believes concerns around cannabilization risk and effect on Marlboro from Juul deal are overstated. Projects the investment in Juul to generate an after-tax return exceeding its current weighted-average cost of capital in 2023. Says remains "fully" committed to the success of IQOS in the U.S. Says encourages the FDA to take action industry-wide, specifically in the form of banning retail and vape store sales of all non-traditional flavors until the youth issue is addressed. Believes a menthol ban would be inappropriate and subject to judicial challenge. For 2019, continues to expect earnings growth to come in the last three quarters of the year with a mid-single digit decline in the first quarter.