Altria and Philip Morris stocks fall in sympathy with BAT after news of huge writedown

Altria Group Inc.
MO,
+0.16%
and Philip Morris International Inc.’s stocks
PM,
-0.42%
fell in premarket trade Wednesday, caught up in the downdraft created by British American Tobacco’s massive $31.5 billion writedown of its cigarette brands. BAT’s stock
BATS,
-6.95%
was down 8% in London after it announced the writedown, which covers its acquired U.S. combustibles brands, as it assesses their value over 30 years. U.S. brands it holds include Camel and Newport. Altria and Philip Morris were down 1.3%. Jefferies analyst Owen Bennett said that while BAT’s business is clearly under pressure, “post call there are reasons not to be too negative: 1) possible upside from US next year; 2) both the vape & pouch businesses profitable already, even with the disposable pressures on the former, while we think the additional heated investment is needed. We’ve said before, the focus on pricing vs below-the-line has been wrong; 3) appears open to selling part of ITC stake, with possible buyback implications,” Bennett wrote in a note. ITC is the Imperial Tobacco Company of India.