Citi has revised its price target for Altria Group (MO, Financial), increasing it to $55 from the previous $52, while maintaining a Neutral stance on the company's shares. The adjustment reflects a complex outlook for Altria as it navigates a challenging U.S. market environment.
The investment firm anticipates a "weak" performance from Altria in the upcoming first quarter. This prediction is influenced by factors such as a challenging economic backdrop in the United States and the recent delisting of NJOY Holdings. These elements are expected to weigh on the company's short-term operational results.
Despite these challenges, Citi recognizes potential in Altria's On! nicotine pouch products, forecasting continued growth in their sales volume. This segment is seen as a positive aspect amid other hurdles the company faces. The evolution of the On! brand could be critical in supporting Altria's overall performance in a competitive market.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Altria Group Inc (MO, Financial) is $56.90 with a high estimate of $73.00 and a low estimate of $46.00. The average target implies an downside of 3.08% from the current price of $58.71. More detailed estimate data can be found on the Altria Group Inc (MO) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Altria Group Inc's (MO, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Altria Group Inc (MO, Financial) in one year is $47.46, suggesting a downside of 19.16% from the current price of $58.71. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Altria Group Inc (MO) Summary page.
MO Key Business Developments
Release Date: January 30, 2025
- Adjusted Diluted EPS Growth: Increased by 3.4% for the full year.
- Dividends and Share Repurchases: Over $10.2 billion returned to shareholders.
- NJOY Consumables Shipment Volume: Grew by more than 15% to 12.8 million units in Q4.
- NJOY Device Shipment Volume: Increased by more than 22% to 1.1 million units in Q4.
- Oral Nicotine Pouches Growth: Grew 9.6 share points year-over-year in Q4.
- on! Shipment Volume: Increased by more than 44% year-over-year to nearly 44 million cans in Q4.
- Smokeable Products Adjusted OCI Growth: 5.5% in Q4 and 2% for the full year.
- Smokeable Products Adjusted OCI Margins: Expanded to 61.2% in Q4 and 61.6% for the full year.
- Net Price Realization for Smokeable Products: 11.3% for Q4 and 10.1% for the full year.
- Domestic Cigarette Volume Decline: 8.8% in Q4 and 10.2% for the full year.
- Oral Tobacco Products Adjusted OCI Growth: 13% in Q4.
- Oral Tobacco Products Adjusted OCI Margins: Increased to 69.5% in Q4.
- ABI Adjusted Equity Earnings: $159 million for Q4, down 8.1% year-over-year.
- Total Debt-to-EBITDA Ratio: 2.1 times as of December 31.
- 2025 Adjusted Diluted EPS Guidance: Range of $5.22 to $5.37, representing 2% to 5% growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Altria Group Inc (MO, Financial) reported a 3.4% growth in adjusted diluted earnings per share for the full year, demonstrating strong financial performance.
- The company returned over $10.2 billion to shareholders through dividends and share repurchases, highlighting its commitment to shareholder value.
- NJOY and on! smoke-free products showed encouraging performance with volume and share growth in their respective categories.
- Altria Group Inc (MO) expanded NJOY's distribution to over 100,000 stores and achieved a 15% growth in NJOY consumables shipment volume in the fourth quarter.
- Helix, the company behind on!, achieved profitability ahead of its 2025 goal, indicating strong performance in the oral tobacco category.
Negative Points
- The widespread availability of illicit disposable e-vapor products is jeopardizing the long-term opportunity for tobacco harm reduction.
- Illicit products represent more than 60% of the e-vapor category, creating a challenging operating environment for responsible manufacturers.
- Altria Group Inc (MO) is reassessing its smoke-free goals and NJOY targets due to the unexpected growth of the illicit e-vapor market.
- The ITC issued an exclusion order against NJOY's ACE product, which could limit FDA-authorized choices and impact public health.
- The smokeable products segment reported a decline in domestic cigarette volumes by 10.2% for the full year, reflecting shifts in consumer preferences.
