Altria: High Yield Driven by Cigarettes, Not Vapes
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
0mins
Source: seekingalpha
- Earnings Report: Altria's non-GAAP EPS of $1.30 missed expectations by $0.02, although revenue of $5.08 billion exceeded forecasts by $50 million, indicating resilience in revenue growth but ongoing pressure on profitability.
- Market Analysis: Despite the rising market share of vapes and oral tobacco products, Altria's high yield remains primarily driven by traditional cigarette sales, suggesting challenges in the company's transformation that could impact future growth potential.
- Rating Upgrade: Analysts have upgraded Altria's rating, anticipating a turnaround in 2026, reflecting market confidence in its long-term strategy, although short-term profitability fluctuations remain a concern.
- Industry Outlook: As the tobacco industry evolves, Altria must accelerate its product diversification strategy to address shifting consumer preferences and increasingly stringent regulatory environments, which will have profound implications for its future market position.
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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: 63.130
Low
57.00
Averages
65.60
High
72.00
Current: 63.130
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: High Yield Driven by Cigarettes, Not Vapes
- Earnings Report: Altria's non-GAAP EPS of $1.30 missed expectations by $0.02, although revenue of $5.08 billion exceeded forecasts by $50 million, indicating resilience in revenue growth but ongoing pressure on profitability.
- Market Analysis: Despite the rising market share of vapes and oral tobacco products, Altria's high yield remains primarily driven by traditional cigarette sales, suggesting challenges in the company's transformation that could impact future growth potential.
- Rating Upgrade: Analysts have upgraded Altria's rating, anticipating a turnaround in 2026, reflecting market confidence in its long-term strategy, although short-term profitability fluctuations remain a concern.
- Industry Outlook: As the tobacco industry evolves, Altria must accelerate its product diversification strategy to address shifting consumer preferences and increasingly stringent regulatory environments, which will have profound implications for its future market position.
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Altria Group Q4 Earnings Slightly Miss Estimates
- Revenue Decline: Altria Group reported Q4 net revenue of $5.8 billion, a 2.1% decrease year-over-year, primarily driven by a 2.7% drop in smokeable product revenue, reflecting industry-wide declines and inventory pressures.
- Shipment Volume Drop: Domestic cigarette shipment volume in the smokeable products segment fell by 7.9%, influenced by the growth of illicit e-vapor products and discretionary income pressures, indicating intensified market competition and shifting consumer trends.
- Flat EPS: Adjusted diluted EPS stood at $1.30, unchanged from last year but missing the consensus estimate of $1.32, highlighting challenges in the company's profitability amid a competitive landscape.
- Future Outlook: The company projects adjusted EPS for 2026 to be between $5.56 and $5.72, indicating a growth potential of 2.5% to 5.5%, while also targeting mid-single-digit annual dividend growth through 2028, demonstrating a commitment to shareholder returns.
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