Financial Performance and Stock Analysis
With a market cap of nearly $87.4 billion, Altria Group, Inc. (MO) stands as a prominent player in the tobacco industry. Based in Richmond, Virginia, the company produces and sells a variety of smokeable and oral tobacco products, including Marlboro cigarettes, Black & Mild cigars, and Copenhagen and Skoal smokeless tobacco, along with e-vapor products under its NJOY ACE brand.
Over the past year, Altria’s stock has outperformed the broader market. Shares have surged by 27.4%, surpassing the S&P 500 Index ($SPX), which rose by 23.3%. However, in a shorter six-month view, MO’s shares only increased by 2%, while the SPX enjoyed an 11.7% growth.
Diving deeper, Altria has managed to beat the Consumer Staples Select Sector SPDR Fund’s (XLP) 8.5% growth over the past year, but it trails slightly behind XLP’s 2.2% return during the last six months.
Q4 Earnings Report and Market Reaction
On January 30, shares of MO fell 2.1% following its Q4 earnings announcement. The company reported an adjusted earnings of $1.29 per share—better than analysts expected—and revenues nearing $6 billion. Despite a 9.3% increase in earnings compared to the same quarter the previous year, revenue saw very little change, largely due to a drop in net sales from smokeable products.
The decline in cigarette sales hindered the overall performance, with volumes down 8.8%. In contrast, the oral tobacco segment saw significant growth, with shipment volumes increasing by 15.3% year-over-year. Nonetheless, investors expressed concern over the company’s guidance for 2025, which projected adjusted EPS growth of 2% to 5%, landing below the anticipated $5.35.
Looking ahead, analysts forecast a 4.5% year-over-year growth in EPS for Altria, bringing it to $5.35 by the close of December. Altria has had a mixed history of earnings surprises over the last year, achieving above expectations in two of the last four quarters.
Currently, among the 11 analysts tracking Altria, the consensus rating is a “Hold,” summarizing four “Strong Buy,” five “Hold,” and two “Strong Sell” ratings.
Analyst Recommendations and Future Outlook
This analyst landscape is slightly more positive than it was three months prior, with three analysts now suggesting a “Strong Buy.” On January 31, BofA Securities affirmed its “Buy” rating on Altria but adjusted its price target to $61, indicating a potential upside of 18.4% from current levels.
The average price target stands at $54.33, suggesting a modest upside of 5.4%, while the top price target of $65 hints at a 26.1% potential growth.
On the date of publication, Neharika Jain did not hold positions in any of the securities mentioned in this article. All information herein is provided for informational purposes only. For additional information, please refer to the Barchart Disclosure Policy.
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The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
