Altria Group (MO) AI Stock Analysis

• Market Cap: $94.80B
• Dividend Yield: 7.21%
• Average Volume (3M): 12.09M
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.20
• Revenue Growth: -0.28%
• EPS Growth: 43.51%
• Country: US
• Employees: 6,200
• Sector: Consumer Defensive
• Sector Strength: 93
• Industry: Tobacco
• EPS (TTM): 6.55
• Shares Outstanding: 1,690,661,600
• 10 Day Avg. Volume: 13,800,005
• 30 Day Avg. Volume: 12,090,666
• PEG Ratio: 0.20
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.76
• Price to Cash Flow (P/CF): 7.30
• P/FCF Ratio: 7.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $54.88
• Price Target Upside: -2.12% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

Altria Group's stock is supported by strong financial performance and robust technical indicators, reflecting its resilience in the tobacco industry. The company's low P/E ratio and high dividend yield enhance its appeal, despite challenges such as negative equity, cash flow inconsistencies, and regulatory issues. The earnings call provided a balanced outlook, emphasizing growth in smoke-free products but acknowledging market risks.

Positive Factors

Business Strategy

Management is committed to shareholder returns with a progressive dividend policy and buybacks.

Financial Performance

MO reported 4Q24 adjusted EPS of $1.29, +9.3% YoY and compared to BofAe $1.27/ Visible Alpha (consensus) EPS of $1.28.

Negative Factors

Legal Issues

An adverse patent infringement ruling could lead to NJOY being pulled from shelves, impacting sales.

Market Challenges

The widespread availability of illicit disposable e-vapor products represents more than 60% of the e-vapor category and has given pause to the achievability of MO’s near-term smoke-free volume and revenue goals.

Altria Group Business Overview & Revenue Model

Company Description

Altria Group, Inc., through its subsidiaries, manufactures and sells smokeable and oral tobacco products in the United States. The company provides cigarettes primarily under the Marlboro brand; cigars and pipe tobacco principally under the Black & Mild brand; and moist smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands, as well as provides on! oral nicotine pouches. It sells its tobacco products primarily to wholesalers, including distributors; and large retail organizations, such as chain stores. Altria Group, Inc. was founded in 1822 and is headquartered in Richmond, Virginia.

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 and revenue growth, with a 17.15% increase in revenue and a significant improvement in net profit margin to 46.90% in 2024. However, the negative equity and high reliance on debt pose notable financial risks. Cash flow inconsistencies further underscore the need for improved cash management.

Income Statement

Altria Group shows strong income statement performance with consistent revenue growth from $20.5 billion in 2023 to $24 billion in 2024, marking a 17.15% increase. The gross profit margin remains high at 59.80% in 2024, indicating efficient production and sales operations. The net profit margin improved significantly to 46.90% in 2024 from 39.65% in 2023, reflecting enhanced profitability. However, consistent high-level profitability may be challenged by the competitive nature of the tobacco industry.

Balance Sheet

The balance sheet reveals financial stability concerns with a negative stockholders' equity of $-2.24 billion in 2024, causing a deficit in the equity ratio. A high debt-to-equity ratio, resulting from negative equity, indicates potential risk and reliance on debt financing. Despite these concerns, the company maintains substantial total assets of $35.2 billion, providing some stability.

Cash Flow

Altria's cash flow statement presents mixed results. Operating cash flow is significant at $9.29 billion in 2023, although it is absent in 2024, which raises questions about cash conversion efficiency. The absence of free cash flow in 2024 and volatility in cash flows across periods highlight potential liquidity risks. Improvements in cash flow management could enhance financial flexibility.

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: Neutral
• Last Price: 56.07
• 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 Neutral. The current price of 56.07 is below the 20-day moving average (MA) of 57.52, above the 50-day MA of 54.89, and above the 200-day MA of 50.78, indicating a neutral trend. The MACD of 1.14 indicates Negative momentum. The RSI at 62.87 is Neutral, neither overbought nor oversold. The STOCH value of 74.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MO.

Altria Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MO	72 Outperform	$94.80B	8.57	-503.31%	7.21%	-0.28%	43.51%
PM	67 Neutral	$234.19B	33.32	-37142.11%	3.55%	7.75%	-9.85%
RLX	63 Neutral	$2.30B	29.10	3.49%	0.44%	106.83%	10.27%
Sector *	62 Neutral	$20.22B	14.00	-15.99%	3.22%	1.17%	3.32%
UVV	62 Neutral	$1.33B	10.84	8.32%	5.98%	12.88%	-6.33%
BTI	61 Neutral	$90.00B	24.00	5.87%	7.38%	-2.51%	―
TPB	57 Neutral	$968.49M	25.50	27.80%	0.52%	-0.13%	2.92%

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.