Altria Earnings: Price Increases Save the Day, but Continued Volume Declines Are Concerning

Altria reported $1.00 in earnings per share in the first quarter of 2023, a whisker above our estimate in spite of weaker cigarette volumes than we had anticipated. A robust gross margin performance, in spite of higher manufacturing and distribution costs, accounted for the upside to our estimates, confirmation of our thesis that Altria will offer defensive qualities in the event of a deterioration in the health of the U.S. consumer. We retain our wide moat rating and $52 per share fair value estimate.