Altria Faces Declining Tobacco Sales with 7.4% Dividend Yield
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 07 2026
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Source: NASDAQ.COM
- Declining Sales: Altria's cigarette sales fell by 8.2% in Q3 2025 compared to Q3 2024, with a 10.6% drop over the first nine months, indicating a long-term decline in its core business that could impact future cash flow and dividend sustainability.
- Market Share Concentration: While Altria holds a 40% overall market share and nearly 60% in the premium segment in the U.S., approximately 88% of its cigarette sales come from the single Marlboro brand, making it vulnerable to market shifts.
- Strategic Missteps: Altria's decision to spin off Philip Morris International has proven detrimental, as international cigarette sales have outperformed U.S. sales, leading to increased competition in the non-cigarette nicotine market.
- High Dividend Appeal: Despite its core business decline, Altria maintains a high dividend yield of 7.4%, attracting income-focused investors, but this also highlights the underlying risks and uncertainties in its business model.
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Analyst Views on MO
Wall Street analysts forecast MO stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MO is 65.60 USD with a low forecast of 57.00 USD and a high forecast of 72.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
4 Buy
1 Hold
1 Sell
Moderate Buy
Current: 63.620
Low
57.00
Averages
65.60
High
72.00
Current: 63.620
Low
57.00
Averages
65.60
High
72.00
About MO
Altria Group, Inc. operates a portfolio of tobacco products for United States tobacco consumers aged 21+. Its segments include smokeable products and oral tobacco products. The smokeable products segment consists of combustible cigarettes and machine-made large cigars. The oral tobacco products segment includes moist smokeless tobacco (MST) products and oral nicotine pouches. Its wholly owned subsidiaries include manufacturers of both combustible and smoke-free products. In combustibles, it owns Philip Morris USA Inc. (PM USA), and John Middleton Co. (Middleton), which are cigarette manufacturers. Its smoke-free portfolio includes ownership of U.S. Smokeless Tobacco Company LLC (USSTC), a global MST manufacturer, Helix Innovations LLC (Helix), a manufacturer of oral nicotine pouches, and NJOY, LLC (NJOY), an e-vapor manufacturer with a commercialized product portfolio. The brand portfolios of its operating companies include Marlboro, Black & Mild, Copenhagen, Skoal, on! and NJOY.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Altria Group Reports 2025 Financials and 2026 Guidance
- Financial Performance: In 2025, Altria reported net revenues of $23.28 billion, a 3.1% decline year-over-year, primarily driven by decreased revenues in the smokeable products segment, indicating challenges from intensified market competition and shifting consumer preferences.
- Earnings Per Share: The adjusted diluted EPS for 2025 was $5.42, reflecting a 4.4% increase, despite a significant 63.1% drop in reported diluted EPS to $0.66, largely due to substantial non-cash impairment charges and unfavorable tax impacts.
- Shareholder Returns: The company returned $8 billion to shareholders through dividends and share repurchases in 2025, including repurchasing 4.8 million shares at a cost of $288 million in Q4, demonstrating a strong commitment to shareholder value.
- Future Guidance: Altria expects its 2026 adjusted diluted EPS to range between $5.56 and $5.72, representing a growth rate of 2.5% to 5.5%, reflecting cautious optimism about market recovery despite uncertainties in regulatory and market conditions.
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Altria Q4 Earnings Beat Expectations Despite EPS Miss
- Earnings Highlights: Altria reported a Q4 non-GAAP EPS of $1.30, missing expectations by $0.02, while revenue of $5.08 billion, down 0.4% year-over-year, beat market expectations by $50 million, indicating resilience in revenue generation.
- Future Outlook: The company anticipates adjusted diluted EPS for full-year 2026 to range between $5.56 and $5.72, reflecting a growth rate of 2.5% to 5.5% from a base of $5.42 in 2025, showcasing confidence in future profitability.
- Market Reaction: Despite the EPS miss, Altria's high yield is underpinned by traditional cigarette sales rather than vapes and oral pouches, highlighting the continued significance of conventional tobacco products in the company's revenue stream.
- Investor Sentiment: Technical analysis suggests Altria is mispriced and oversold, with recent rating upgrades indicating a positive investor outlook on the company's turnaround potential, especially with the upcoming earnings season approaching.
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