Aug 04, 2017

Data Overview Summary

52 Week High-Low $77.79 - $60.01 Altria’s earnings lagged the Zacks Consensus Estimate in the second quarter 2017,
20 Day Average Volume 10,589,175
while revenues beat the same. Both Altria’s earnings and revenues grew year-over-
year driven by strong cigarette pricing and increase in smokeless products. In fact,
Beta 0.61
Altria’s MarkTen e-cigarette brand continued to boost volume in the quarter.
Market Cap 125.74 B However, we note that Altria has underperformed the industry in the past six months.
Dividend / Div Yld $2.44 / 3.72% The ongoing anti-tobacco campaigns and price rise to offset the rising taxes have
Industry Tobacco
been hurting the demand for tobacco. Moreover, consumers are opting for e-
cigarettes or substitutes for cigarettes, in turn affecting the cigarette volume.
Industry Rank 91 / 265 (Top 34%)
Nevertheless, the company expects higher earnings towards the second half of the
Current Ratio 0.83 year. We believe the company’s strong brand portfolio, its shift to low-risk, smokeless
Debt/Capital 52.85% tobacco to boost market share and its efforts to return value to its shareholders
remains appealing.
Net Margin 56.98%

Price/Book (P/B) 10.13

Price/Cash Flow (P/CF) 206.81 Elements of the Zacks Rank

Earnings Yield 4.99%
Agreement Estimate Revisions (60 days)
Debt/Equity 1.12

Value Score 100% 100% 100% 50%

P/E (F1) 20.02

P/E (F1) Rel to Industry 2.39 Q1 (Current Qtr) Q2 (Next Qtr) F1 (Current Year) F2 (Next Year)
PEG Ratio 2.81 Revisions: 2 Revisions: 3 Revisions: 4 Revisions: 4
Up: 0 Down: 2 Up: 3 Down: 0 Up: 0 Down: 4 Up: 2 Down: 2
P/S (F1) 6.38

P/S (TTM) 4.85

Magnitude Consensus Estimate Trend (60 days)
P/CFO 206.81

P/CFO Rel to Industry 167.99

EV/EDITDA Annual 6.03

Growth Score
Proj. EPS Growth (F1/F0) 8.15% 60 30 7 Current 60 30 7 Current 60 30 7 Current 60 30 7 Current
Days Days Days Days Days Days Days Days Days Days Days Days
Hist. EPS Growth (Q0/Q-1) 1.32 Q1 -1.12% Q2 +2.53% F1 -0.30% F2 0%
Qtr CFO Growth -1,230.10

2 Yr CFO Growth -59.03 Upside Zacks Consensus Estimate vs. Most Accurate Estimate
Return on Equity (ROE) 46.80%

(NI - CFO) / Total Assets 32.36

Asset Turnover 0.59

Momentum Score Most Accurate: 0.87 Most Accurate: 0.81 Most Accurate: 3.27 Most Accurate: 3.56
Zacks Consensus: 0.88 Zacks Consensus: 0.81 Zacks Consensus: 3.27 Zacks Consensus: 3.56
1 week Volume change 120.37%
Q1 -1.14% Q2 0.00% F1 0.00% F2 0.00%
1 week Price Cng Rel to Industry -11.44%

(F1) EPS Est 1 week change 0.00%

Surprise Reported Earnings History
(F1) EPS Est 4 week change -0.30%

(F1) EPS Est 12 week change -0.71%

(Q1) EPS Est 1 week change -0.87%

Reported: 0.85 Reported: 0.73 Reported: 0.68 Reported: 0.82 Average 4 Qtr
Surprise
Estimate: 0.86 Estimate: 0.74 Estimate: 0.67 Estimate: 0.81
Q End 06/17 Q End 03/17 Q End 12/16 Q End 09/16

© 2017 Zacks Investment Research, All Rights Reserved 10 S. Riverside Plaza Suite 1600 · Chicago, IL 60606
 The data on the front page and all the charts in the report represent market data as of 08/03/17, while the report's text is as of
08/01/2017

Overview
Altria Group, Inc. was founded in 1919 and is headquartered at
Richmond, VA. It is the holding company for Philip Morris USA, Inc.
(PM USA), U.S. Smokeless Tobacco Company LLC (UST), John
Middleton Inc., Sherman Group Holdings, LLC and its subsidiaries,
Nu Mark LLC, Ste. Michelle Wine Estates Ltd. (Ste. Michelle) and
Philip Morris Capital Corporation (PMCC). Altria holds an equity
investment in Anheuser-Busch InBev SA/NV (AB InBev).

PM USA manufactures and sells cigarettes and certain smokeless

products in the United States. UST manufactures and sells
smokeless products and wine. John Middleton Inc. is a leading
manufacturer of machine-made large cigars. Ste. Michelle produces
and markets premium wines and it imports and markets products in
the United States. PMCC is a financial company engaged primarily in
leasing activities.

Altria reports under the following segments on the basis of products:

Smokeable Products (89% of FY16 Sales): The segment,

which comprises mainly of PM USA, sells major brands like
Marlboro cigarettes, Virginia Slims cigarettes and Parliament
cigarettes.

Smokeless Tobacco (8% of FY16 Sales): The segment was formed after the acquisition of UST and its smokeless tobacco
business in Jan 2009. The smokeless products segment includes brands like Copenhagen, Skoal, Red Seal, Husky and Marlboro
Snus, a PM USA spit-less smokeless tobacco product.

Wine (2% of FY16 Sales): The segment was formed after the acquisition of UST and its premium wine business — Ste.
Michelle. The main brands are Chateau Ste. Michelle and Columbia Crest. The company also owns wineries or distributes wines
from several other wine regions and foreign countries.

All Other (1% of FY16 Sales): Altria holds investments in finance leases, principally in transportation (including aircraft), power
generation and manufacturing equipment and facilities.

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 Reasons To Buy:
Strong Brand Portfolio: Altria’s impressive brand portfolio of tobacco and wine The company maintains
products helps it to maintain the strong business momentum and generate decent strong brand portfolio and
profit. The company has been able to maintain leading positions in cigarettes with enhances its lineup with
Marlboro, machine-made large cigars with Black & Mild and smokeless tobacco with continuous innovations.
Copenhagen and Skoal. In the Smokeless segment, Copenhagen Long Cut The company adapts to
Wintergreen and Copenhagen Black have been popular among adult dippers. evolving demands and has
developed several non
Further, Altria is implementing strategies to enhance Skoal's equity and carefully combustible less harmful
manage Skoal Classic price gaps in select geographies. These strategies are expected tobacco products.
to boost the brand’s share in the coming quarters. PM USA invests continuously in
improving the brand architecture of Marlboro and has upgraded its shopping website –
marlboro.com – which provides engaging content directly to adult smokers through mobile devices. PM USA, Altria’s smokeable
subsidiary is also trying to enhance the brand equity of the Marlboro brand and has offered Marlboro Slate, a bold menthol product
in the Marlboro Black family. Further, it has acquired Nat Sherman, in order to augment the smokeable segment. Nat Sherman’s
premium, excellent and differentiated brand portfolio, complements the brands in Altria's smokeable products segment. Further, the
Marlboro couponing app developed by the company is already very popular and is accepted at 100,000 retail locations. It covers
almost 70% of industry volume. Moreover, the company strives to enhance the digital platform and popularize it through aggressive
marketing.

Adapting to Evolving Demands: There has been a general shift among consumers toward low-risk, smokeless tobacco products
due to serious health hazards of smoking cigarettes. Altria promptly responded to the changing market scenario and offered several
reduced risk tobacco products which helped it to maintain share. Altria collaborated with Okono A/S and developed innovative, non-
combustible nicotine-containing products for adult smokers. Its flagship MarkTen e-cigarette brand (launched in 2014) and Green
Smoke e-vapor products are some of the examples. MarkTen XL – a variant on MarkTen launched by the company in 2016 have
been encouraging in lead markets. MarkTen is now the number two e-vapor brand nationally, with a national retail market share of
approximately 13% in mainstream retail channels in the second quarter 2017.

Altria’s marketing and technology agreement with Philip Morris under which the latter markets Altria’s MarkTen e-cigarettes
internationally and the Altria distributes two of Philip Morris’ heated tobacco products in the U.S. is boosting business of both the
companies. The companies have also decided to partner on a regulatory engagement related to the products. Additionally, the
companies have extended their technology sharing agreement in July 2015 to work on a joint research, development and
technology-sharing framework for developing unconventional cigarettes. On Mar 31, Philip Morris has applied for pre-market
approval of its iQOS heated tobacco product with the U.S. Food and Drug Administration, which began its substantive review in
May. These heated tobacco products will be sold by Altria in U.S., if the FDA grants Philip Morris’ request. Such collaboration is
encouraging as it will help the participating companies maintain market share amid declining volume and growing awareness
against tobacco products.

Strong Pricing is the Growth Driver: Altria has also managed to remain afloat and generate revenues with higher cigarette pricing
in the face of unfavorable tax environment and declining cigarette volumes. In Mar 2017, Altria and the other tobacco companies
raised prices of their cigarettes to offset the impact of increased state excise taxes in California. Altria announced an increase of
$0.08 per pack on Mar 19. Though higher pricing might lead to possible decline in cigarette consumption, it is seen that smokers
tend to absorb price increases owing to the addictive quality of cigarettes.

Enhances Shareholders’ Value: Altria has been consistently returning value to its shareholders through dividends and share
buybacks. In 2016, Altria rewarded shareholders by paying over $4.5 billion in dividends and repurchasing over $1 billion of shares
under an expanded $3 billion share repurchase program. In the second quarter 2017, the company paid almost $1.2 billion in
dividends and nearly $2.4 billion in the first half of 2017. Since the spin-off of Philip Morris International in 2009, Altria has increased
its dividend every year, with the recent hike of 8% in 2016. Altria maintains a dividend payout ratio target of around 80% of its
adjusted earnings per share, which is among the highest in peer group. During the second quarter, Altria repurchased 14.4 million
shares under its existing share repurchase program for approximately $1.05 billion. As of June 30, 2017, Altria had approximately
$335 million remaining in the share repurchase program. In July, Altria’s board authorized a $1 billion expansion to the program.
Altria expects to complete the expanded $4 billion share repurchase program by the end of the second quarter of 2018.

Further, the takeover of SABMiller by Anheuser-Busch InBev in Oct 2016 helped Altria, SABMiller’s biggest investor, maximizing
the value of its shareholders. Altria received a 9.6% ownership of AB InBev, and approximately $5.3 billion in pre-tax cash as per the
terms of the acquisition which the company used to reinvest in its core businesses or/and return value to shareholders.

Cost-Reduction Initiative: Altria has started a productivity initiative in Jan 2016 that is expected to deliver approximately $300
million in annual productivity savings by the end of 2017. The company plans to save through reduced spending on certain
infrastructure and a leaner organization. Some of the savings will be invested in initiatives like brand building, harm reduction, and
regulatory capabilities. The company has made considerable progress on the program. Further, Altria announced plans to
consolidate certain of its manufacturing facilities to streamline operations and achieve greater efficiencies. The consolidation,

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 scheduled to be completed by first-quarter 2018 is expected to deliver approximately $50 million in cost savings by the end of 2018.
Such initiatives are anticipated to help the company reap higher profits over the long term.

Reasons To Sell:
Headwinds Hurting Stock: The company’s shares have declined 9.1% in the past six months, Higher excise taxes
in comparison to the industry’s growth of 7.3% and broader Consumer Staples sector’s are lowering
growth of 8.9% in the same time frame, primarily due to declining use of tobacco since past
volumes of the
many quarters. Strict anti-smoking regulations by governments globally in the form of
restrictions on packaging and high excise duties are also negatively impacting the stock. company. Moreover
Additionally, consumers’ preference for e-cigarettes or substitutes for cigarettes are largely anti tobacco
affecting the cigarette volume. Evidently, Altria’s top line lagged the Zacks Consensus restrictions are
Estimate in six out of the last eight quarters. impacting top lines
Stock Looks Overvalued: Considering price-to-earnings (P/E) ratio, Altria looks pretty
negatively.
overvalued when compared with the S&P 500. The stock has a trailing 12-month P/E ratio of
21.09, which is below its median level of 23.16 and high level of 25.56 scaled in the past one
year. On the contrary, the trailing 12-month P/E ratio for the S&P 500 is 20.06.

Declining Demand for Cigarettes: The company has been witnessing declining demand for cigarettes due to the ongoing anti-
tobacco campaigns and price rise to offset the rising taxes. We note that California is a high-volume state and accounted for
approximately 7% of total U.S. cigarette industry volume. Following the $2 per pack cigarette excise tax increase in California that
came into effect on April 1, California's volume contribution dropped to 5% which drove total U.S. industry volume down
approximately 4.5% in the second quarter. In addition, Altria’s leading brand Marlboro has a strong share in California of over 50%.
Thus Marlboro was disproportionally impacted by the tax increase contributing to its decline of 0.3 of a national retail share point in
the second quarter to 43.5%. The company expects these dynamics to continue to dampen Marlboro's share through the second
half of 2017. Moreover, the company continues to anticipate an approximate 1% negative impact on industry volumes for the full
year as a result of the excise tax increases in California on April 1, and Pennsylvania last August.

Most recently on Jul 28, U.S. Food and Drug Administration (FDA) has proposed to lower nicotine in cigarettes to non-addictive or
minimally addictive levels, as nicotine in tobacco makes it addictive. This has further raised concerns of accelerated sales declines
for traditional cigarettes.

Restrictions on Tobacco Consumption: The tobacco industry faces many challenges, which may pressure margins.
Governments around the world are imposing restrictions on tobacco companies which, in turn, are lowering cigarette consumption.
The U.S. Food and Drug Administration (FDA) has made it mandatory for tobacco companies to use precautionary labels on
cigarette packets to dissuade customers from smoking. In May 2016, FDA expanded its restrictions to e-cigarettes alongside
traditional tobacco products. FDA had announced that tobacco makers must seek marketing authorization for any tobacco product
introduced after Feb 15, 2007. The law was extended to include e-cigarettes, pipe tobacco, cigars and hookah also.

Moreover, the European Union and the FDA have proposed a ban on menthol in accordance with the Tobacco Control Act which
essentially states that menthol cigarettes have an adverse impact on public health and suggests the removal of menthol. Moreover,
this ban will create a serious black market for these products, which would be incredibly detrimental to all tobacco companies.

The regulatory authorities have imposed marketing and product regulations on e-cigarettes as well as there is not much scientific
evidence to back their ability to help smokers quit or smoke less. Such a regulation is expected to adversely impact the e-cigarette
business and top line of the company in the coming quarters.

Last Earnings Report

Altria Earnings Miss Estimates, Revenues Beat in Q2 Quarter Ending 06/2017

Report Date Jul 27, 2017

Altria reported mixed results in the second quarter of 2017, wherein while earnings lagged
the Zacks Consensus Estimate, revenues beat the same. The company however kept Sales Surprise 1.60%
earnings guidance intact for 2017. EPS Surprise -1.16%
Quarterly EPS 0.85
Quarter in detail
Annual EPS (TTM) 3.08

Adjusted earnings of $0.85 per share lagged the Zacks Consensus Estimate by a penny.
However, earnings increased 4.9% year over year driven by higher operating income in the
smokeable and smokeless segments and lower outstanding shares. This was offset by lower equity earnings from Altria’s beer
investment.

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 Net revenue increased 2.2% to $6.7 billion in the second quarter primarily driven by higher net revenues in the smokeable and
smokeless products segments, offsetting the decline in Wine segment. Revenues net of excise taxes increased 3.8% year over year to
$5.1 billion and also exceeded the Zacks Consensus Estimate of $4.9 billion by 1.6%.

In e-vapor, Altria’s subsidiary Nu Mark LLC continues to boost MarkTen volume and retail share. Encouragingly, MarkTen has become
the second most preferred e-vapor brand nationally, with a second-quarter national retail market share of approximately 13% in
mainstream retail channels.

Segment Details

Smokeable Products Segment: Despite a large cigarette excise tax increase in California, which negatively impacted volume and retail
share in the second quarter, revenues net of excise taxes increased 1.6% year over year to $5.9 billion. The increase was primarily
driven by strong pricing, partially offset by lower volume and higher promotional investments. Total shipment volume decreased 2.9%
year over year to 30.6 billion units. Cigarettes retail market share declined 0.4 share point to 50.8% in the quarter.

Adjusted operating companies income (OCI) increased 6.4%, while adjusted OCI margins expanded 1.6 percentage points to 51.7%.

Smokeless Products: Revenues net of excise taxes increased 7.8% to $564 million in the second quarter, as it rebounded from the
preceding quarter’s decline of 2.5% which was impacted by the recall of some of its smokeless tobacco products. The second quarter
was driven by higher pricing and volume, partially offset by unfavorable mix. Volumes grew 1.4% to 221 million units, where
Copenhagen and Skoal shipment volumes grew 1.3% and others increased 2.3% in the quarter. Total smokeless products retail share
decreased 0.8 share points to 54.1% in the second quarter. Adjusted OCI surged 9.8% and margins increased 0.7 percentage points to
70.0%.

Wine: The segment’s revenues went down 12.3% year over year to $150 million due to trade inventory reductions and increased
competitive activity. Wine shipment volume declined 14.5% to 1.8 million units.
Ste. Michelle’s adjusted OCI declined 32.4%, primarily due to lower volume. OCI margins decreased 5.2 percentage points to 17.2%.

Financial Updates

Altria ended the quarter with cash and cash equivalents of $5.23 billion, long-term debt of $13.89 billion, and total shareholders’ equity
of $12.26 billion.

In May 2017, Altria’s board declared a regular quarterly dividend of $0.61 per share, which means that Altria had paid almost $1.2
billion in dividends in the second quarter and nearly $2.4 billion for the first half of 2017. During the second quarter, Altria repurchased
14.4 million shares under its existing share repurchase program for approximately $1.05 billion. As of June 30, 2017, Altria had
approximately $335 million remaining in the share repurchase program. In July, Altria’s board authorized a $1 billion expansion to the
program. Altria expects to complete the expanded $4 billion share repurchase program by the end of the second quarter of 2018.

Altria expects to continue to return a large amount of cash to shareholders in the form of dividends by maintaining a dividend payout
ratio target of approximately 80% of its adjusted earnings.

Consolidation of Manufacturing Facilities

In Oct 2016, Altria announced the consolidation of several of its manufacturing facilities to streamline operations and achieve greater
efficiencies. The consolidation, scheduled to be completed by the first quarter of 2018 is expected to deliver approximately $50 million
in cost.

Outlook

Altria reaffirmed earnings guidance for full-year 2017 and expects adjusted earnings in a range of $3.26–$3.32, up 7.5% to 9.5%
compared with adjusted earnings of $3.03 in 2016. Further, it anticipates higher adjusted diluted EPS growth in the second half of the
year compared with the first half. Altria continues to expect 2017 full-year effective tax rate on operations to be approximately 36%.

Recent News
Altria Announces Cash Dividend – May 18

The board of Altria Group has declared a regular cash dividend of $0.61 per share, which was paid on Jul 10 to shareholders of record
as of Jun 15.

Altria Expands Premium Cigarette Category with Sherman Buy - Jan 18, 2017

Altria Group has taken over privately-held Sherman Group Holdings, LLC and its subsidiaries (Nat Sherman) in an attempt to expand its

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 premium smokeable category. However, the company did not disclose the terms of the transaction.

Nat Sherman specializes in super-premium cigarettes and premium cigars. The takeover is in sync with Altria’s growth strategy of
expanding its portfolio. Additionally, Nat Sherman joins Philip Morris USA Inc. and John Middleton Co. as part of Altria’s smokeable
products segment.

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 Industry Analysis Zacks Industry Rank: 91 / 265 (Top 34%) Top Peers

22nd Century Group, Inc (XXII)

Imperial Tobacco Group PLC (IMBBY)
Turning Point Brands, Inc. (TPB)
Vector Group Ltd. (VGR)
JAPAN TOB INC (JAPAY)
British American Tobacco p.l.c. (BTI)
Philip Morris International Inc (PM)
ITC Ltd. (ITCTY)

Industry Comparison Tobacco | Position in Industry: 3 of 9 Industry Peers

MO X Industry S&P 500 BTI JAPAY IMBBY

VGM Score - -
Market Cap 125.74 B 2.08 B 20.59 B 121.54 B 69.56 B 45.44 B
# of Analysts 10 2.5 14 6 3 3
Dividend Yield 4.32% 2.09% 1.82% 3.94% 0.00% 4.29%

Value Score - -
Cash/Price -3.08 -1.69 9.77 15.72 6.46 0.72
EV/EBITDA 6.03 8.95 12.74 14.04 NA NA
PEG Ratio 2.81 2.54 1.99 1.68 5.95 1.75
Price/Book (P/B) 10.13 6.65 3.22 11.81 3.02 5.41
Price/Cash Flow (P/CF) 206.81 12.42 13.49 17.16 13.42 9.26
P/E (F1) 20.02 17.58 18.98 17.65 17.51 12.39
Price/Sales (P/S) 6.38 4.62 2.50 5.64 3.65 4.05
Earnings Yield 4.99% 5.28% 5.25% 5.76% 5.58% 8.30%
Debt/Equity 1.12 0.28 0.68 1.91 0.13 NA
Cash Flow ($/share) 3.15 1.52 5.41 3.80 1.30 4.73

Growth Score - -
Hist. EPS Growth (3-5 yrs) 8.15% 8.08% 7.16% 21.89% -7.17% 8.09%
Proj. EPS Growth (F1/F0) 8.05% -6.16% 9.44% -44.96% -8.95% -45.95%
Curr. Cash Flow Growth 7.30% 7.30% 5.40% 19.33% 16.24% 6.81%
Hist. Cash Flow Growth (3-5 yrs) 6.49% 4.11% 6.71% -1.14% NA 4.11%
Current Ratio 0.83 1.49 1.37 0.87 1.18 NA
Debt/Capital 52.85% 55.57% 41.65% 65.60% 11.82% NA
Net Margin 56.98% 6.96% 9.86% NA 19.57% NA
Return on Equity 46.80% 18.48% 15.93% 123.69% 18.57% 82.97%
Sales/Assets 0.59 0.78 0.54 0.40 0.45 0.78
Proj. Sales Growth (F1/F0) 9.68% 7.07% 5.19% 7.77% -3.91% -69.11%

Momentum Score - -
Daily Price Chg -0.02% -0.01% -0.10% 1.78% -0.96% 2.80%
1 Week Price Chg -11.44% -4.07% -0.00% -5.92% 1.02% -4.07%
4 Week Price Chg -11.81% -2.94% 2.17% -3.11% 1.99% -2.78%
12 Week Price Chg -7.01% -6.19% 3.07% -5.85% 2.41% -9.42%
52 Week Price Chg -1.62% -1.03% 11.66% 3.36% NA -17.61%
20 Day Average Volume 10,067,033 119,974 0 3,194,950 64,352 104,089
(F1) EPS Est 1 week change 0.00% 0.00% 0.08% 0.00% 1.02% 0.00%
(F1) EPS Est 4 week change -0.30% 0.00% 0.32% 1.33% 1.36% 1.14%
(F1) EPS Est 12 week change -0.71% -0.30% 1.00% 0.77% -4.03% 4.42%
(Q1) EPS Est Mthly Chg -0.75% -0.38% 0.00% NA NA NA

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 Zacks Rank Education
The Zacks Rank is calculated from four primary inputs: Agreement, Magnitude, Upside and Surprise.

Agreement
This is the extent which brokerage analysts are revising their earnings estimates in the same
direction. The greater the percentage of estimates being revised higher, the better the score for this
component.

For example, if there were 10 estimate revisions over the last 60 days, with 8 of those revisions up,
and the other 2 down, then the agreement factor would be 80% positive. If, however, 8 were to the
downside with only 2 of them up, then the agreement factor would be 80% negative. The higher the
percentage of agreement the better.

Magnitude
This is a measure based on the size of the recent change in the current consensus estimates. The
Zacks Rank looks at the magnitude of these changes over the last 60 days.

In the chart to the right, the display shows the consensus estimate from 60-days ago, 30-days ago,
7-days ago, and the most current estimate The difference between the current estimate and the
estimate from 60-days ago is displayed as a percentage. A larger positive percentage increase will
score better on this component.

Upside
This is the difference between the most accurate estimate, as calculated by Zacks, and the
consensus estimate. For example, a stock with a consensus estimate of $1.00, and a most
accurate estimate of $1.05 will have an upside factor of 5%.

This is not an indication of how much a stock will go up or down. Instead, it's a measure of the
difference between these two estimates. This is particularly useful near earnings season as a
positive upside percentage can be used to help predict a future surprise.

Surprise
The Zacks Rank also factors in the last few quarters of earnings surprises. Companies that have
positively surprised in the recent past have a tendency of positively surprising again in the future (or
missing if they recently missed).

A stock with a recent track record of positive surprises will score better on this factor than a stock
with a history of negative surprises. These stocks will have a greater likelihood of positively
surprising again.

Zacks Style Score Education

The Zacks Style Score is as a complementary indicator to the Zacks Rank, giving investors a way to focus
on the best Zacks Rank stocks that best fit their own stock picking preferences.

Academic research has proven that stocks with the best Growth, Value, and Momentum characteristics outperform the market. The
Zacks Style Scores rate stocks on each of these individual styles and assigns a rating of A, B, C, D and F. An A, is better than a B; a B
is better than a C; and so on.

As an investor, you want to buy stocks with the highest probability of success. That means buying stocks with a Zacks Rank #1 or #2,
Strong Buy or Buy, which also has a Style Score of an A or a B.

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 Disclosures
The analysts contributing to this report do not hold any shares of this stock. The EPS and revenue forecasts are the Zacks
Consensus estimates. Additionally, the analysts contributing to this report certify that the views expressed herein accurately reflect the
analysts' personal views as to the subject securities and issuers. Zacks certifies that no part of the analysts compensation was, is, or
will be, directly or indirectly, related to the specific recommendation or views expressed by the analyst in the report. Additional
information on the securities mentioned in this report is available upon request. This report is based on data obtained from sources we
believe to be reliable, but is not guaranteed as to accuracy and does not purport to be complete. Because of individual objectives, the
report should not be construed as advice designed to meet the particular investment needs of any investor. Any opinions expressed
herein are subject to change. This report is not to be construed as an offer or the solicitation of an offer to buy or sell the securities
herein mentioned. Zacks or its officers, employees or customers may have a position long or short in the securities mentioned and buy
or sell the securities from time to time. Zacks uses the following rating system for the securities it covers which results from a
proprietary quantitative model using trends in earnings estimate revisions. This model is proven most effective for judging the timeliness
of a stock over the next 1 to 3 months. The model assigns each stock a rank from 1 through 5. Zacks Rank 1 = Strong Buy. Zacks Rank
2 = Buy. Zacks Rank 3 = Hold. Zacks Rank 4 = Sell. Zacks Rank 5 = Strong Sell. We also provide a Zacks Industry Rank for each
company which provides an idea of the near-term attractiveness of a company s industry group. We have 264 industry groups in total.
Thus, the Zacks Industry Rank is a number between 1 and 264. In terms of investment attractiveness, the higher the rank the better.
Historically, the top half of the industries has outperformed the general market.

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