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1. Company Snapshot

1.a. Company Description

Altria Group, Inc., through its subsidiaries, manufactures and sells smokeable and oral tobacco products in the United States.The company provides cigarettes primarily under the Marlboro brand; cigars and pipe tobacco principally under the Black & Mild brand; and moist smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands, as well as provides on! oral nicotine pouches.It sells its tobacco products primarily to wholesalers, including distributors; and large retail organizations, such as chain stores.


Altria Group, Inc.was founded in 1822 and is headquartered in Richmond, Virginia.

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1.b. Last Insights on MO

Altria Group, Inc.'s recent performance was negatively impacted by disappointing Q3 performance in the oral nicotine segment, particularly with its on! pouches. The company's core cigarette business faces retail share pressure from downtrading, despite maintaining profitability and margin expansion. Additionally, Altria's Q3 earnings report revealed a solid quarter with adjusted EPS up 5%, but the stock dropped 7% in reaction. Weakness in the oral nicotine segment raises concerns. (Source: Altria: A Solid Third Quarter - With A Catch, October 30)

1.c. Company Highlights

2. Altria's Q3 Earnings: Strong Financials and Guidance Raise

Altria Group's third-quarter financial performance was robust, with adjusted diluted earnings per share (EPS) growing 3.6% to $1.36. The smokeable products segment saw adjusted operating company's income (OCI) grow 0.7% to nearly $3 billion, with adjusted OCI margins expanding 1.3 percentage points to 64.4%. The actual EPS came out at $1.45, beating estimates of $1.44. The company's smokeable OCI grew 2.5% year-to-date, with controllable costs managed over the long term. Analysts estimate next year's revenue growth at 0.1%, indicating a relatively stable outlook.

Publication Date: Nov -01

📋 Highlights
  • EPS Growth:: Adjusted diluted earnings per share rose 3.6% to $1.36, reflecting robust financial performance.
  • Smokeable Segment Strength:: Adjusted OCI grew 0.7% to $3B, with margins expanding 1.3pp to 64.4% and Marlboro leading at 59.6% premium market share.
  • Shareholder Returns:: $6B returned through $5.2B in dividends and $712M in buybacks, including a 3.9% dividend hike to $1.06/share.
  • 2025 Guidance Raised:: EPS guidance lifted to $5.37–$5.45 ($5.37–$5.45), signaling 3.5–5% growth from 2024.
  • Oral Tobacco Resilience:: Adjusted OCI declined <1%, stabilized by Helix's performance, despite intensified nicotine pouch competition.

Segment Performance

The smokeable products segment performed well, with Marlboro maintaining its leadership in the premium segment, holding a 59.6% share. Basic also grew 1.4 share points year-over-year. The oral tobacco products segment saw adjusted OCI decline less than 1%, with Helix's performance contributing to stability. The nicotine pouch category saw intensified competition, but Altria's on! brand performed well, with retail takeaway volume steady.

Guidance Raise and Shareholder Returns

Altria raised its 2025 guidance range for adjusted diluted EPS to $5.37-$5.45, representing 3.5-5% growth from 2024. The company returned nearly $6 billion to shareholders, including $5.2 billion in dividends and $712 million in share repurchases. Altria increased its regular quarterly dividend by 3.9% to $1.06 per share, marking its 60th dividend increase in 56 years, and expanded its share repurchase program to $2 billion.

Valuation and Outlook

With a P/E Ratio of 10.71 and a Dividend Yield of 7.31%, Altria's valuation suggests a relatively stable and income-generating profile. The company's EV/EBITDA ratio stands at 9.95, indicating a reasonable valuation relative to its earnings. Altria's guidance raise reflects its confidence in financial performance, and the company aims to meet its mid-single-digit EPS CAGR goal through 2028.

Future Prospects

The partnership with KT&G was expanded, offering opportunities for operational efficiencies, alternative revenue streams, and international expansion. Altria expects to benefit from duty drawbacks, although it's not the key engine driving group EPS growth to high single digits. The FDA's pilot program on nicotine pouches may impact Altria's decision on the national launch of on! PLUS, a premium-priced product with differentiation.

3. NewsRoom

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Altria Group, Inc. (NYSE: MO) Price Prediction and Forecast 2025-2030 (December 2025)

Dec -03

Source: 247wallst.com

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Can Altria Sustain EPS Gains as Revenues Decrease 1.7% Y/Y?

Dec -02

Source: zacks.com

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68 Graham Value All-Star (GVAS) November Dividend Dogs Show 27 'Safer' And 17 Ideal Buys

Dec -02

Source: seekingalpha.com

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8 'Safer' Dividend Buys In Barron's 23 Better November Bets Than T-Bills

Nov -28

Source: seekingalpha.com

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Is Altria Group Too Cheap to Ignore at Today's Price?

Nov -28

Source: fool.com

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MO vs. PM: Which Tobacco Giant Is Winning the Smoke-Free Race?

Nov -27

Source: zacks.com

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Dividend Harvesting Portfolio Week 247: $24,700 Allocated, $2,737.06 In Projected Dividends

Nov -27

Source: seekingalpha.com

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Quality Dividends On Clearance: Secure +7% Yields Today

Nov -25

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.17%)

6. Segments

Smokeable Products

Expected Growth: 3.5%

The 3.5% growth in Smokeable Products from Altria Group, Inc. is driven by pricing power, market share gains, and a stable demand for traditional tobacco products. The segment's growth is also supported by the company's efforts to innovate and expand its product portfolio, including the launch of new products and flavors.

Oral Tobacco Products

Expected Growth: 1.0%

The oral tobacco products segment of Altria Group, Inc. is driven by steady demand for smokeless products, stable pricing, and effective cost management. The 1.0 growth rate reflects a mature market with slow but steady increases in shipment volumes and market share gains, offset by declining traditional tobacco use.

ALL other

Expected Growth: 2.0%

The fundamental drivers for Altria Group, Inc.'s growth include a 2.0% increase in revenue, driven by pricing power, reduced discounting, and increased market share. Other growth drivers include innovative products, such as IQOS, and steady performance from its core tobacco brands, including Marlboro. The company also benefits from a strong dividend yield and efficient cost management.

7. Detailed Products

Marlboro Cigarettes

Marlboro is a leading international cigarette brand with a wide range of products, including Marlboro Red, Marlboro Gold, and Marlboro Menthol.

Skoal Smokeless Tobacco

Skoal is a popular brand of smokeless tobacco products, including moist snuff and pouches.

Black & Mild Cigars

Black & Mild is a brand of machine-made cigars that are known for their smooth flavor and affordability.

Nu Mark E-Cigarettes

Nu Mark is a brand of e-cigarettes and vaping products that are designed to provide a smoking alternative.

Ste. Michelle Wine

Ste. Michelle is a leading producer of wine in the United States, with a portfolio of brands that include Columbia Crest, Chateau Ste. Michelle, and 14 Hands.

8. Altria Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The tobacco industry faces a growing threat from substitutes, particularly e-cigarettes and vaping products. However, Altria Group, Inc. has a strong presence in the market and has been adapting to the changing landscape by investing in alternative products, such as IQOS.

Bargaining Power Of Customers

The bargaining power of customers in the tobacco industry is relatively low. Tobacco products are addictive, and customers tend to be loyal to specific brands. Additionally, Altria Group, Inc. has a strong portfolio of brands, including Marlboro, which is one of the most recognized and trusted brands in the industry.

Bargaining Power Of Suppliers

The bargaining power of suppliers in the tobacco industry is relatively low. Altria Group, Inc. has a large and diversified supply chain, and the company has significant negotiating power with its suppliers.

Threat Of New Entrants

The threat of new entrants in the tobacco industry is high, particularly with the rise of e-cigarettes and vaping products. New companies have entered the market, and existing companies have expanded their product offerings, increasing competition for Altria Group, Inc.

Intensity Of Rivalry

The intensity of rivalry in the tobacco industry is high, with several large players competing for market share. Altria Group, Inc. competes with other major tobacco companies, such as Reynolds American and British American Tobacco, as well as newer entrants in the e-cigarette and vaping market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 109.86%
Debt Cost 5.47%
Equity Weight -9.86%
Equity Cost 7.58%
WACC 5.26%
Leverage -1113.76%

11. Quality Control: Altria Group, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Altria

A-Score: 8.0/10

Value: 6.8

Growth: 5.8

Quality: 7.5

Yield: 10.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

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Imperial Brands

A-Score: 7.7/10

Value: 5.8

Growth: 5.3

Quality: 6.3

Yield: 9.4

Momentum: 9.5

Volatility: 9.7

1-Year Total Return ->

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Universal

A-Score: 7.2/10

Value: 7.8

Growth: 5.9

Quality: 4.0

Yield: 10.0

Momentum: 7.0

Volatility: 8.7

1-Year Total Return ->

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Philip Morris

A-Score: 6.8/10

Value: 4.3

Growth: 4.1

Quality: 7.1

Yield: 8.0

Momentum: 8.5

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
BAT

A-Score: 6.8/10

Value: 3.4

Growth: 3.6

Quality: 5.9

Yield: 9.4

Momentum: 9.5

Volatility: 9.0

1-Year Total Return ->

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Scandinavian Tobacco Group

A-Score: 6.1/10

Value: 8.1

Growth: 4.0

Quality: 5.3

Yield: 9.4

Momentum: 1.5

Volatility: 8.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

58.34$

Current Price

58.34$

Potential

-0.00%

Expected Cash-Flows