Altria Group (MO) AI Stock Analysis

• Market Cap: $101.88B
• Dividend Yield: 6.8%
• Average Volume (3M): 11.15M
• Price to Earnings (P/E): 10.0
• Beta (1Y): 0.18
• Revenue Growth: -1.03%
• EPS Growth: 25.20%
• Country: US
• Employees: 14,654
• Sector: Consumer Defensive
• Sector Strength: 81
• Industry: Tobacco
• EPS (TTM): 1.23
• Shares Outstanding: 1,684,451,800
• 10 Day Avg. Volume: 8,826,815
• 30 Day Avg. Volume: 11,148,406
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 8.55
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $56.86
• Price Target Upside: -4.32% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

Altria's stock shows strong financial performance through profitability and cash flow generation, but faces risks due to a highly leveraged balance sheet. Technical indicators depict strong momentum, though caution is advised due to potential overbought conditions. Valuation metrics are favorable, highlighting potential undervaluation and attractive dividends. The earnings call presented both growth opportunities and market challenges, leading to a balanced outlook with significant risks and potential returns.

Positive Factors

Earnings

MO reported 1Q25 adjusted EPS of $1.23, +6% YoY on a comparable basis.

Profitability Strategy

Optimism exists that MO can navigate headwinds given its sophisticated strategy to maximize profitability while continuing to invest in its business.

Negative Factors

Cigarette Volume Declines

MO's Q1 cigarette volumes were down sharply, declining more than expected and Marlboro’s retail share also declined.

Illicit Trade

Illicit trade remains troublesome for Altria, although recent measures could potentially slow it down.

Altria Group Business Overview & Revenue Model

Company Description

Altria Group, Inc. is a leading American corporation in the tobacco industry, primarily known for its ownership of Philip Morris USA, a major cigarette manufacturer. The company focuses on the production and sale of tobacco products, including cigarettes, smokeless tobacco, and innovative nicotine products. Altria's core brands include Marlboro, which is one of the most recognized and best-selling cigarette brands globally. The company is also involved in the wine industry through its subsidiary, Ste. Michelle Wine Estates, and holds strategic investments in the cannabis sector and alternative nicotine product companies.

How the Company Makes Money

Altria Group makes money primarily through the sale of its tobacco products. The company's key revenue stream comes from the sale of cigarettes, with Marlboro being its flagship brand that contributes significantly to its earnings. Additionally, Altria generates revenue from its smokeless tobacco products under brands like Copenhagen and Skoal. The company has diversified its revenue sources through investments in the burgeoning cannabis market and alternative nicotine delivery systems, including a stake in Juul Labs, an e-cigarette company. Altria's wine business also adds to its revenue, although it is a smaller segment compared to its tobacco operations. Partnerships and strategic investments in companies like Anheuser-Busch InBev further enhance its financial performance.

Altria Group Financial Statement Overview

Summary

Altria Group demonstrates strong profitability with a solid gross profit margin and operational efficiency. However, the balance sheet's negative equity signals high financial risk. Cash flow generation is robust, indicating strong liquidity. Overall, the company shows solid profitability and cash flow metrics but is constrained by its leveraged financial position.

Income Statement

The company's income statement shows a stable gross profit margin of approximately 71.8% for the TTM, which is strong. However, the net profit margin has decreased to 48.7% for the TTM compared to 55.1% in the previous year, indicating reduced profitability. Revenue growth over the past year was modest at 2.65%, reflecting slow growth. The EBIT margin for the TTM is 49.3%, exhibiting strong operational efficiency. Overall, the company maintains solid profitability metrics, albeit with slight declines in net income.

Balance Sheet

The balance sheet reveals a concerning financial structure with negative stockholders' equity, indicating that liabilities exceed assets. The debt-to-equity ratio cannot be calculated due to negative equity, which signals high financial risk. Despite this, the company has managed a stable asset base over the years. The equity ratio is negative, highlighting significant leverage and potential financial instability. The company faces high financial risk due to its leveraged position.

Cash Flow

The cash flow statement exhibits strong free cash flow generation with a TTM free cash flow of $8.45 billion. The free cash flow growth rate is slightly negative, showing a decrease from the previous year. Operating cash flow is robust, and the operating cash flow to net income ratio is 0.84, demonstrating effective cash generation relative to net income. The free cash flow to net income ratio is 0.83, indicating a healthy conversion of earnings into cash. Overall, the company has strong cash flow metrics with good liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
20.44B	20.50B	20.69B	21.11B	20.84B
	Gross Profit
14.37B	14.28B	14.25B	13.99B	13.02B
	EBIT
11.24B	11.55B	8.53B	11.56B	10.87B
	EBITDA
15.07B	12.35B	12.53B	12.16B	11.75B
	Net Income Common Stockholders
11.26B	8.13B	5.76B	2.48B	4.47B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.13B	3.69B	4.03B	4.54B	4.95B
	Total Assets
35.18B	38.57B	36.95B	39.52B	47.41B
	Total Debt
24.93B	26.23B	26.68B	28.04B	29.47B
	Net Debt
21.80B	22.55B	22.65B	23.50B	24.53B
	Total Liabilities
37.37B	42.06B	40.88B	41.13B	44.49B
	Stockholders Equity
-2.24B	-3.54B	-3.97B	-1.61B	2.84B
Cash Flow		Free Cash Flow
8.61B	9.09B	8.05B	8.24B	8.15B
	Operating Cash Flow
8.75B	9.29B	8.26B	8.40B	8.38B
	Investing Cash Flow
2.17B	-1.28B	782.00M	1.21B	-143.00M
	Financing Cash Flow
-11.49B	-8.37B	-9.54B	-10.03B	-5.40B

Altria Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 59.43
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MO, the sentiment is Positive. The current price of 59.43 is above the 20-day moving average (MA) of 58.74, above the 50-day MA of 57.67, and above the 200-day MA of 52.44, indicating a bullish trend. The MACD of 0.86 indicates Negative momentum. The RSI at 56.37 is Neutral, neither overbought nor oversold. The STOCH value of 77.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MO.

Altria Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PM	74 Outperform	$270.96B	35.59	-37142.11%	3.15%	6.83%	-4.85%
MO	73 Outperform	$101.88B	10.02	-503.31%	6.80%	-1.03%	25.20%
UVV	70 Outperform	$1.45B	11.70	8.79%	5.58%	12.88%	-5.64%
Sector *	64 Neutral	$8.79B	14.77	5.05%	174.29%	3.63%	3.48%
RLX	64 Neutral	$2.24B	29.90	3.49%	0.43%	106.83%	10.27%
BTI	61 Neutral	$96.48B	25.05	5.87%	7.06%	-2.51%	―
TPB	58 Neutral	$1.15B	30.50	27.53%	0.38%	3.17%	-2.23%

Altria Group Corporate Events

Altria Group Announces Leadership Change and Buyback Program

On January 29, 2025, Altria’s Board of Directors elected Richard S. Stoddart as an independent director, effective February 3, 2025, and authorized a new $1 billion share repurchase program. The company reported strong financial results for 2024, including significant cash returns to shareholders and announced guidance for 2025 earnings, while facing challenges in the e-vapor market due to the proliferation of illicit products.