Altria Navigates Declining Tobacco Sales
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Source: NASDAQ.COM
- Sales Decline Trend: Barclays' latest analysis shows traditional cigarette volumes declined by 4.3% to 5.5% year-over-year, while Altria's decline was only 4.7%, indicating its relatively stable market performance.
- Competitor Performance: In comparison, British American Tobacco's volumes plummeted by 9.3% and Imperial Brands fell by 9%, highlighting Altria's stronger competitive position and ability to navigate market challenges more effectively.
- Alternative Product Growth: Despite the decline in traditional tobacco sales, nicotine pouch volumes surged by 22%, reflecting consumer interest in next-generation tobacco products, suggesting Altria has room for improvement in this area.
- Dividend Appeal: Altria remains an attractive income stock, drawing attention from investors seeking stable returns, even as it faces a shrinking traditional market, particularly appealing to dividend-focused investors.
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Analyst Views on MO
Wall Street analysts forecast MO stock price to fall
8 Analyst Rating
4 Buy
3 Hold
1 Sell
Moderate Buy
Current: 73.410
Low
57.00
Averages
65.00
High
72.00
Current: 73.410
Low
57.00
Averages
65.00
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 Q1 Earnings Exceed Expectations
- Significant Revenue Growth: Altria reported Q1 sales of $4.76 billion, marking a 5.3% year-over-year increase that surpassed analyst expectations of $4.57 billion, indicating strong performance and stable market demand in the tobacco sector.
- Improved Profitability: The adjusted EPS of $1.32 exceeded analysts' forecast of $1.25 by 5.9%, reflecting effective cost control and pricing strategies that bolster investor confidence and enhance overall financial health.
- Market Share Stability: Marlboro's share in the premium segment continues to grow, with the CEO highlighting the role of data analytics in strengthening brand competitiveness, ensuring Altria's leadership in high-end tobacco products.
- Cautious Future Outlook: Despite ongoing investments in smoke-free products, management expressed concerns about macroeconomic uncertainties, emphasizing the need to closely monitor inflation and gas prices' impact on consumer behavior to maintain market competitiveness.
See More
Analysts Predict Market Returns for the Next Decade
- Market Return Expectations: Vanguard anticipates average annual returns of only 4% to 5% over the next decade, while Goldman Sachs' Peter Oppenheimer believes U.S. stocks will underperform compared to global markets, highlighting increasing market uncertainty.
- Tobacco Industry Comparison: While Altria Group boasts a forward dividend yield of 5.9%, Philip Morris International's 3.6% yield is backed by stronger performance, particularly with a 15% revenue growth in smoke-free products, indicating a long-term competitive edge.
- Pharmaceutical Industry Challenges: Merck's cancer drug Keytruda will lose patent protections starting in 2028; however, the company expects to generate over $70 billion in annual revenue in the next decade, showcasing the potential of its new product pipeline.
- Uniqueness of Tech Stocks: IBM, a technology company, has raised its dividend for 31 consecutive years with a forward yield of 3%, and its software and consulting services account for 78% of total revenue, providing stable cash flow and dividend support amid economic fluctuations.
See More
Comparative Income Outlook for Philip Morris and Altria
- Income Growth Comparison: While Altria's forward yield stands at 5.9%, Philip Morris's 3.6% yield may be more attractive over the next decade, as its 15% revenue growth in smoke-free product lines demonstrates stronger market adaptability.
- Market Challenge Analysis: Altria faces significant impacts from the smoking cessation movement in the U.S., leading to a slight revenue decline in 2025 primarily due to a 10% drop in cigarette sales volume, which could affect its future dividend growth capacity.
- Patent Risk for Pharmaceuticals: Merck's Keytruda is set to lose some patent protections by 2028; although management anticipates that its new drug portfolio could generate over $70 billion in annual revenue in the next decade, the challenge of replacing Keytruda remains daunting.
- Uniqueness of IBM: International Business Machines (IBM) stands out as a technology stock offering a 3% dividend yield, with its core business model focused on software and consulting services, ensuring stable recurring revenue that is ideal for holding during economic volatility.
See More
Altria Group Shares Surge 10% Amid Steady Earnings Growth
- Stock Price Surge: Altria Group's shares rose 10% in April, according to S&P Global Market Intelligence, primarily driven by steady earnings growth through price increases, showcasing the company's robust performance in the tobacco industry.
- Earnings Growth Analysis: Despite declining cigarette usage in the U.S., Altria has managed to grow its smokeable products' net revenue after taxes by 5.2% year-over-year in Q1, with operating earnings increasing by 8.3%, indicating the sustainability of its profit model.
- Shareholder Return Strategy: Management has reduced shares outstanding by approximately 10% over the past five years while increasing dividends by 23% annually, demonstrating the company's commitment to returning capital to shareholders and boosting investor confidence.
- Future Outlook: Although Altria's P/E ratio has risen to 15 and its dividend yield has decreased to 5.6%, it is expected to continue generating positive returns for shareholders over the next five years, despite challenges from rising valuations and declining fundamentals.
See More
Altria Group Rated as Low-Risk Investment
- Investment Rating Reaffirmed: Stifel reaffirmed its Buy rating and $68 price target for Altria Group on March 31, indicating the company's ability to achieve earnings growth despite a moderate decline in the tobacco market, showcasing its stable investment value.
- New Product Rollout: Altria is actively rolling out its newly authorized on! PLUS nicotine pouches nationally, planning to leverage promotional pricing to drive trial in the rapidly growing market, aiming to capitalize on emerging opportunities.
- Sales and Pricing Dynamics: While on! brand volumes decreased by 15.5% in March, the unit price increased to $4.60, significantly above the 52-week average of $3.00, demonstrating the company's success in maintaining strong pricing power.
- Market Outlook Analysis: Although Altria is viewed as a potentially attractive investment, analysts suggest that certain AI stocks may offer greater upside potential, indicating that investors should carefully consider the balance of risk and reward in their selections.
See More
Altria Group Announces 2026 Annual Shareholders Meeting Details
- Meeting Schedule: Altria Group will host its 2026 Annual Meeting of Shareholders on May 14, 2026, at 9:00 a.m. Eastern Time, conducted via live audio webcast to facilitate shareholder participation.
- Voting Procedures: Shareholders as of the record date of March 25, 2026, will be able to vote electronically during the meeting and submit questions, although they are encouraged to vote beforehand using methods outlined in the 2026 Proxy Statement to enhance voting efficiency.
- Participation Guidelines: Non-shareholders can access and listen to the meeting as guests via Guest Login but will not have voting or questioning rights; participation instructions are available on Altria's website to ensure transparency.
- Corporate Responsibility Commitment: Altria emphasizes that corporate responsibility is a core tenet of its vision, focusing on delivering for consumers, preventing underage use, helping employees thrive, and reducing environmental impact, with related reports accessible on its website to showcase its commitment to societal responsibilities.
See More
Altria Q1 Earnings Exceed Expectations
- Significant Revenue Growth: Altria reported Q1 sales of $4.76 billion, marking a 5.3% year-over-year increase that surpassed analyst expectations of $4.57 billion, indicating strong performance and stable market demand in the tobacco sector.
- Improved Profitability: The adjusted EPS of $1.32 exceeded analysts' forecast of $1.25 by 5.9%, reflecting effective cost control and pricing strategies that bolster investor confidence and enhance overall financial health.
- Market Share Stability: Marlboro's share in the premium segment continues to grow, with the CEO highlighting the role of data analytics in strengthening brand competitiveness, ensuring Altria's leadership in high-end tobacco products.
- Cautious Future Outlook: Despite ongoing investments in smoke-free products, management expressed concerns about macroeconomic uncertainties, emphasizing the need to closely monitor inflation and gas prices' impact on consumer behavior to maintain market competitiveness.
See More
Analysts Predict Market Returns for the Next Decade
- Market Return Expectations: Vanguard anticipates average annual returns of only 4% to 5% over the next decade, while Goldman Sachs' Peter Oppenheimer believes U.S. stocks will underperform compared to global markets, highlighting increasing market uncertainty.
- Tobacco Industry Comparison: While Altria Group boasts a forward dividend yield of 5.9%, Philip Morris International's 3.6% yield is backed by stronger performance, particularly with a 15% revenue growth in smoke-free products, indicating a long-term competitive edge.
- Pharmaceutical Industry Challenges: Merck's cancer drug Keytruda will lose patent protections starting in 2028; however, the company expects to generate over $70 billion in annual revenue in the next decade, showcasing the potential of its new product pipeline.
- Uniqueness of Tech Stocks: IBM, a technology company, has raised its dividend for 31 consecutive years with a forward yield of 3%, and its software and consulting services account for 78% of total revenue, providing stable cash flow and dividend support amid economic fluctuations.
See More
Comparative Income Outlook for Philip Morris and Altria
- Income Growth Comparison: While Altria's forward yield stands at 5.9%, Philip Morris's 3.6% yield may be more attractive over the next decade, as its 15% revenue growth in smoke-free product lines demonstrates stronger market adaptability.
- Market Challenge Analysis: Altria faces significant impacts from the smoking cessation movement in the U.S., leading to a slight revenue decline in 2025 primarily due to a 10% drop in cigarette sales volume, which could affect its future dividend growth capacity.
- Patent Risk for Pharmaceuticals: Merck's Keytruda is set to lose some patent protections by 2028; although management anticipates that its new drug portfolio could generate over $70 billion in annual revenue in the next decade, the challenge of replacing Keytruda remains daunting.
- Uniqueness of IBM: International Business Machines (IBM) stands out as a technology stock offering a 3% dividend yield, with its core business model focused on software and consulting services, ensuring stable recurring revenue that is ideal for holding during economic volatility.
See More
Altria Group Shares Surge 10% Amid Steady Earnings Growth
- Stock Price Surge: Altria Group's shares rose 10% in April, according to S&P Global Market Intelligence, primarily driven by steady earnings growth through price increases, showcasing the company's robust performance in the tobacco industry.
- Earnings Growth Analysis: Despite declining cigarette usage in the U.S., Altria has managed to grow its smokeable products' net revenue after taxes by 5.2% year-over-year in Q1, with operating earnings increasing by 8.3%, indicating the sustainability of its profit model.
- Shareholder Return Strategy: Management has reduced shares outstanding by approximately 10% over the past five years while increasing dividends by 23% annually, demonstrating the company's commitment to returning capital to shareholders and boosting investor confidence.
- Future Outlook: Although Altria's P/E ratio has risen to 15 and its dividend yield has decreased to 5.6%, it is expected to continue generating positive returns for shareholders over the next five years, despite challenges from rising valuations and declining fundamentals.
See More
Altria Group Rated as Low-Risk Investment
- Investment Rating Reaffirmed: Stifel reaffirmed its Buy rating and $68 price target for Altria Group on March 31, indicating the company's ability to achieve earnings growth despite a moderate decline in the tobacco market, showcasing its stable investment value.
- New Product Rollout: Altria is actively rolling out its newly authorized on! PLUS nicotine pouches nationally, planning to leverage promotional pricing to drive trial in the rapidly growing market, aiming to capitalize on emerging opportunities.
- Sales and Pricing Dynamics: While on! brand volumes decreased by 15.5% in March, the unit price increased to $4.60, significantly above the 52-week average of $3.00, demonstrating the company's success in maintaining strong pricing power.
- Market Outlook Analysis: Although Altria is viewed as a potentially attractive investment, analysts suggest that certain AI stocks may offer greater upside potential, indicating that investors should carefully consider the balance of risk and reward in their selections.
See More
Altria Group Announces 2026 Annual Shareholders Meeting Details
- Meeting Schedule: Altria Group will host its 2026 Annual Meeting of Shareholders on May 14, 2026, at 9:00 a.m. Eastern Time, conducted via live audio webcast to facilitate shareholder participation.
- Voting Procedures: Shareholders as of the record date of March 25, 2026, will be able to vote electronically during the meeting and submit questions, although they are encouraged to vote beforehand using methods outlined in the 2026 Proxy Statement to enhance voting efficiency.
- Participation Guidelines: Non-shareholders can access and listen to the meeting as guests via Guest Login but will not have voting or questioning rights; participation instructions are available on Altria's website to ensure transparency.
- Corporate Responsibility Commitment: Altria emphasizes that corporate responsibility is a core tenet of its vision, focusing on delivering for consumers, preventing underage use, helping employees thrive, and reducing environmental impact, with related reports accessible on its website to showcase its commitment to societal responsibilities.
See More
