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Altria Group Inc (MO)
NYSE:MO
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Altria Group
(NYSE:MO)
72Outperform
Positive Factors
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.
Shareholder Returns
MO completed its $3.4bn buyback program and announced a new $1bn buyback program for 2025.
Negative Factors
Patent Litigation
The unfavorable NJOY patent litigation ruling is a setback for Altria, with the U.S. International Trade Commission ruling against NJOY/Altria in the patent infringement case brought by JUUL.
Product Category Shift
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 (MO) vs. S&P 500 (SPY)
Market Cap
$99.73B
Dividend Yield6.92%
Average Volume (3M)8.86M
Price to Earnings (P/E)8.8
Beta (1Y)0.14
Revenue Growth-0.28%
EPS Growth43.51%
CountryUS
Employees6,400
SectorConsumer Defensive
Sector Strength77
IndustryTobacco
Share Statistics
EPS (TTM)6.55
Shares Outstanding1,690,661,600
10 Day Avg. Volume10,895,227
30 Day Avg. Volume8,855,235
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)N/A
Price to Sales (P/S)4.39
Price to Cash Flow (P/CF)7.30
P/FCF Ratio7.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$55.50Price Target Upside-4.56% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Altria Group Business Overview & Revenue Model
Company DescriptionVirginia-based Altria Group, Inc. is a tobacco company, which manufactures and sells cigarettes, smokeless products, and wine in the United States. Its most popular cigarette brand is Marlboro. It sells cigars principally under the Black & Mild brand, and moist smokeless tobacco products under the Copenhagen, Skoal, Red Seal, and Husky brands. The company also produces and sells varietal and blended table wines, and sparkling wines under the Chateau Ste. Michelle and 14 Hands labels. It also owns wineries in or distributes wines from several other wine regions.
How the Company Makes MoneyAltria 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.85
Very Positive
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.60
Neutral
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.55
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 20.81B | 20.44B | 20.50B | 20.69B | 21.11B | 20.84B |
| Gross Profit | |||||
| 14.03B | 14.34B | 14.28B | 14.25B | 13.99B | 13.02B |
| EBIT | |||||
| 11.67B | 11.24B | 11.55B | 8.53B | 11.56B | 10.87B |
| EBITDA | |||||
| 6.13B | 15.07B | 12.35B | 12.53B | 12.16B | 11.75B |
| Net Income Common Stockholders | |||||
| 1.74B | 11.26B | 8.13B | 5.76B | 2.48B | 4.47B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.13B | 3.13B | 3.69B | 4.03B | 4.54B | 4.95B |
| Total Assets | |||||
| 35.18B | 35.18B | 38.57B | 36.95B | 39.52B | 47.41B |
| Total Debt | |||||
| 24.93B | 24.93B | 26.23B | 26.68B | 28.04B | 29.47B |
| Net Debt | |||||
| 21.80B | 21.80B | 22.55B | 22.65B | 23.50B | 24.53B |
| Total Liabilities | |||||
| 37.37B | 37.37B | 42.06B | 40.88B | 41.13B | 44.49B |
| Stockholders Equity | |||||
| -2.24B | -2.24B | -3.54B | -3.97B | -1.61B | 2.84B |
| Cash Flow | Free Cash Flow | ||||
| 8.09B | 8.61B | 9.09B | 8.05B | 8.24B | 8.15B |
| Operating Cash Flow | |||||
| 8.29B | 8.75B | 9.29B | 8.26B | 8.40B | 8.38B |
| Investing Cash Flow | |||||
| 1.07B | 2.17B | -1.28B | 782.00M | 1.21B | -143.00M |
| Financing Cash Flow | |||||
| -8.65B | -11.49B | -8.37B | -9.54B | -10.03B | -5.40B |
Altria Group Technical Analysis
Positive
58.15
Price Trends
53.41
Positive
53.18
Positive
50.32
Positive
Market Momentum
1.34
Negative
65.63
Neutral
78.99
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 58.15 is above the 20-day moving average (MA) of 55.40, above the 50-day MA of 53.41, and above the 200-day MA of 50.32, indicating a bullish trend. The MACD of 1.34 indicates Negative momentum. The RSI at 65.63 is Neutral, neither overbought nor oversold. The STOCH value of 78.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MO.
Altria Group Risk Analysis
Altria Group disclosed 23 risk factors in its most recent earnings report. Altria Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Altria Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $29.45B | 9.43 | 45.38% | 5.24% | 5.61% | 23.39% | |
72 Outperform | $99.73B | 8.84 | -503.31% | 6.92% | -0.28% | 43.51% | |
67 Neutral | $234.15B | 33.39 | -37142.11% | 3.51% | 7.75% | -9.85% | |
64 Neutral | $2.81B | 33.05 | 4.04% | 0.36% | 110.63% | 693.33% | |
63 Neutral | $20.76B | 13.76 | -10.60% | 7.37% | 1.45% | 9.35% | |
62 Neutral | $1.34B | 11.01 | 8.32% | 5.94% | 12.88% | -6.33% | |
61 Neutral | $89.31B | 23.42 | 5.87% | 7.25% | -2.51% | ― |
* Consumer Defensive Sector Average
Performance Comparison
MO
Altria Group
58.15
18.51
46.70%
BTI
British American Tobacco
41.00
13.05
46.69%
PM
Philip Morris
152.10
61.95
68.72%
UVV
Universal
54.25
6.86
14.48%
IMBBY
Imperial Brands
35.90
14.82
70.30%
RLX
RLX Technology
2.28
0.39
20.63%
Altria Group Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: 10.43% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
Altria reported strong financial performance and growth in smoke-free products, but faced significant challenges from the illicit e-vapor market and regulatory issues, affecting its long-term goals.Highlights
Strong Financial Performance and Shareholder Returns
Altria grew adjusted diluted earnings per share by 3.4% for the full year and returned over $10.2 billion to shareholders through dividends and share repurchases in 2024.
Growth in Smoke-Free Products
NJOY and on! demonstrated volume and share growth, with NJOY consumables shipment volume growing over 15% in Q4. Helix's on! achieved profitability ahead of its 2025 goal.
Expansion in the Oral Tobacco Category
Oral nicotine pouches grew 9.6 share points versus the prior year, with on! shipment volume increasing by more than 44% year-over-year in Q4.
New Share Repurchase Program
Altria's board authorized a new $1 billion share repurchase program for 2025.
Lowlights
Challenges with Illicit E-Vapor Market
The growth of illicit e-vapor products jeopardizes Altria's smoke-free goals, with illicit products representing more than 60% of the e-vapor category.
Litigation and Regulatory Challenges
NJOY faced an exclusion order from the ITC in JUUL's patent case, potentially impacting its market presence.
Decline in Cigarette Industry Volumes
Smokable products segment reported a domestic cigarette volume decline of 8.8% in Q4 and 10.2% for the full year.
Economic Pressure on Consumers
The cumulative impact of inflation continues to pressure adult tobacco consumers, leading to shifts in purchasing behaviors.
Company Guidance
In the Altria Group's 2024 Fourth Quarter and Full Year Earnings Conference Call, CEO Billy Gifford highlighted several key financial metrics and strategic initiatives. Altria achieved a 3.4% growth in adjusted diluted earnings per share for the full year, delivering over $10.2 billion in dividends and share repurchases to shareholders. The smoke-free product portfolio saw significant progress, with NJOY's consumables shipment volume growing by more than 15% to 12.8 million units in the fourth quarter and a full-year volume of 46.6 million units. NJOY's retail share of consumables reached 6.4 share points, increasing by 2.8 share points from the previous year. In the oral tobacco category, on! nicotine pouches achieved a 44% year-over-year shipment volume increase to nearly 44 million cans in the fourth quarter, capturing an 8.9% share of the category. Looking ahead, Altria provided 2025 guidance with an expected adjusted diluted EPS growth rate of 2% to 5%, reflecting a range of $5.22 to $5.37, amidst a dynamic external environment.Altria Group Corporate Events
Executive/Board ChangesStock BuybackFinancial Disclosures
Altria Group Announces Leadership Change and Buyback Program
Positive
Jan 30, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.
