Altria price increase doesnt address ongoing concerns, says Goldman Sachs

Following yesterday's cigarette list price increase, Goldman Sachs analyst Bonnie Herzog said Altria is increasingly becoming more sophisticated and targeted with its pricing strategies. While the analyst expects tobacco stocks will react favorably to the list price increase, Herzog maintains a Neutral rating on Altria shares ahead of the Q4 results on January 28 as the price increase does little to address ongoing concerns related to potential headwinds as a result of the Democratic sweep including the likelihood for greater excise tax increases and stepped up regulation, difficult comps to lap this year, potential cigarette consumer downtrading and Altria's need for stepped-up investment spend to pivot its portfolio to a noncombustible future. The analyst doesn't see a clear path to Altria's historical EPS growth of 7%-9%.