Altria (NYSE:MO) is set to publish its earnings report on Tuesday, April 29, 2025, and the stock’s response historically appears to be uncertain. Over the previous five years, the stock has shown an equal likelihood of either a negative or a positive one-day return after earnings. Specifically, it encountered a negative return 50% of the time, with a median of -2.1%, while the other half of the time recorded a positive return with a median of 1.9%.
Current consensus forecasts predict earnings per share (EPS) of $1.18 on revenues amounting to $4.62 billion. This is in comparison to the previous year’s figures of $1.15 EPS on revenues of $4.72 billion, indicating that analysts expect an improvement in Altria’s net profit margins. This optimistic view is likely bolstered by the ongoing expansion of Altria’s smoke-free product range, including NJOY and on!, which is anticipated to continue being a significant factor in the short term.
Looking at the company’s core financial data, Altria now holds a market capitalization of $99 billion. Its revenue over the last year was $20 billion, displaying strong operational profitability with operating profits of $12 billion and a net income of $11 billion.
For event-driven traders, comprehending Altria’s historical post-earnings stock behavior can be advantageous, although the actual market reaction will depend on how the reported results and future outlook align with investor expectations. Two main strategies can be utilized: first, evaluate the historical chances of positive or negative movement to determine a pre-earnings position; second, examine the relationship between immediate and ensuing medium-term returns following the announcement to possibly set up a trade for the following day.
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Altria’s Historical Odds Of Positive Post-Earnings Return
Here are some insights regarding one-day (1D) post-earnings returns:
- Over the last five years, there are 20 earnings data points recorded, with 10 positive and 10 negative one-day (1D) returns observed. In summary, positive 1D returns occurred approximately 50% of the time.
- The percentage remains unchanged at 50% when considering data from the last 3 years instead of 5.
- The median of the 10 positive returns is 1.9%, while the median of the 10 negative returns is -2.1%.
Additional information regarding the observed 5-Day (5D) and 21-Day (21D) returns following earnings are summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (although not effective if the correlation is weak) involves understanding the relationship between short-term and medium-term returns following earnings, identifying a pair with the strongest correlation, and making the appropriate trade. For instance, if 1D and 5D demonstrate the highest correlation, a trader could position themselves “long” for the next 5 days if the 1D post-earnings return is positive. Below is some correlation data based on a 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and the subsequent 5D returns.
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