Will 2017 Be Altria Group Inc.'s Worst Year Yet?

2016 was a strong year for Altria Group (NYSE: MO), with the stock jumping 20% to be among the best performers in the tobacco industry. Overall, the cigarette giant has done a good job of finding ways to maximize its profits, and there are reasons why bullish investors think that Altria could sustain its positive momentum in 2017. Yet Altria also faces challenges, and if it makes a misstep, then 2017 could easily become a nightmare year for the company. Let's take a look at what it would take to turn 2017 into Altria's worst year yet.

Rising gasoline prices could hurt cigarette demand

Like its tobacco industry peers, Altria relies on sales of cigarettes and other tobacco products at gas stations and convenience stores for a substantial portion of its overall revenue. According to one executive, convenience stores drive 70% of volumes sold, with 160 million consumer transactions taking place there every day. That leaves the company exposed to changes in discretionary income among consumers, and customers' purchasing decisions are sensitive to what they have to pay at the pump and therefore how much they have left in their wallets after filling up.
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