Company Reports

Altria is the dominant cigarette maker in the US. Its Marlboro brand holds a 40% share per Euromonitor, towering above the 14% held by the next-largest maker.

Altria's second-quarter adjusted diluted EPS grew 2.8% to $1.48, driven by 2.4% adjusted operating income growth in smokeable products while oral tobacco fell 8%. Premium cigarette volume decline continued to decelerate, with Marlboro down 7.4% compared with 7.8% in the first quarter.

Altria is the dominant cigarette maker in the US. Its Marlboro brand holds a 40% share per Euromonitor, towering above the 13% held by the next-largest marker. The US market size has remained around $90 billion for several years, as price increases offset volume declines.

Altria's first-quarter adjusted diluted earnings per share grew 7.3% to $1.32, driven by 6.3% adjusted operating income growth in smokeable products while oral tobacco was flat. The premium cigarette volume decline slowed, with Marlboro down 7.8% compared with 12.6% in the fourth quarter.

Altria is the dominant cigarette maker in the US. Its Marlboro brand holds a 40% share per Euromonitor, towering above the 13% held by the next-largest marker. The US market size has remained around $90 billion for several years, as price increases offset volume declines.

Altria's 2025 adjusted diluted EPS grew 4.4% to $5.42, in line with prior guidance. Both smokeable and oral tobacco adjusted operating income grew 1.3%. The premium cigarette volume decline accelerated, with Marlboro down 12.2% from 9% In 2024.

On Dec. 11, Altria announced that CEO Billy Gifford will retire effective May 14. CFO Sal Mancuso will take over as CEO, and current chief strategy and growth officer Heather Newman will become CFO.

Altria is the dominant cigarette producer in the US, with its Marlboro brand holding a 40%-plus share (towering above the 15% held by the next largest). The US market size has remained consistent in the mid-$90 billion range for several years, as higher prices offset lower volumes.

Altria's third-quarter adjusted earnings per share rose 3.6% to $1.45, a slowdown from 7.2% in the first half. Smokeable adjusted operating income, which grew just 0.7% (versus 3.5%), and a decline in oral tobacco adjusted operating income of 0.8% (versus 10.9% growth) drove the deceleration.

Altria dominates the US, its predominant market where cigarette volumes declined 6% per year from 2019 to 2024, faster than the global market's 1% annual loss, according to Euromonitor. Moreover, excise taxes are constantly increasing and regulations tightening.

Altria reported second-quarter adjusted EPS growth of 8.3% to $1.44, as smokeable adjusted operating margin expanded 2.9 percentage points to 64.1% despite a 9.9% volume decline. Oral tobacco net revenue grew 6%, and adjusted operating margin expanded 3.1 percentage points to 68.7%.

Altria offers pure-play tobacco exposure to the US, where cigarette volumes declined 6% per year from 2019 to 2024, faster than the global market's 1% annual loss, according to Euromonitor. Moreover, excise taxes are constantly increasing and regulations tightening.

Altria reported first-quarter adjusted EPS growth of 6% to $1.23, as combustibles operating income grew nearly 3% despite continued elevated volume decline of 13%. The company maintained guidance for full year adjusted EPS growth of 2% to 5%.

Altria offers pure-play tobacco exposure to the US, where cigarette volumes declined 6% per year from 2019 to 2024, faster than the global market's 1% annual loss, according to Euromonitor. Moreover, excise taxes are constantly increasing and regulations tightening.

Altria's 2024 adjusted earnings per share grew 3.4% to $5.12, within guidance of 2.5%-4%. Management expects 2025 adjusted EPS growth of 2%-5%, in line with our prerelease forecast of 2.5%. However, shares were down more than 2% on Jan. 30 after an unfavorable patent ruling for Altria's Njoy vapes.

Wide-moat Altria offers pureplay tobacco exposure to the US, where cigarette volumes declined 6% per year from 2018 to 2023, faster than the global market’s 1% annual loss, according to Euromonitor. Moreover, excise taxes are constantly increasing and regulations tightening (for example, the prospective ban of menthol cigarettes).

In line with guidance that growth would be weighted toward the back half of the year, Altria's third quarter saw revenue net of excise taxes up 1.3% year over year and adjusted EPS up nearly 8%. Shares were up 8% on the return to growth.

Wide-moat Altria offers pureplay tobacco exposure to the US, where cigarette volumes declined 6% per year from 2018 to 2023, faster than the global market’s 1% annual loss, according to Euromonitor. Moreover, excise taxes are constantly increasing and regulations tightening (e.g., the prospective ban of menthol cigarettes).

Wide-moat Altria’s second-quarter results sent shares down about 3.5%, but we think the reaction is a bit overdone. Cigarette volumes declined 13%, with price increases muting the impact on smokeable products' net revenue to just a 6% decline. However, Altria’s first-half 11.5% decline in cigarette volume was better than the 13.7% decline in combustibles volume that British American Tobacco reported for its US segment. This indicates that pressure is industrywide and that Altria’s market-leading Marlboro brand still carries relatively strong pricing power.

We’ve increased our fair value estimate for Altria to $58 per share from $49 as a result of two changes. First, we think the US cigarette industry will have a more gradual long-term decline than our previous contention as the pressure from vaping is fading rapidly. Second, we’ve lowered our cost of equity assumption to 7.5% from 9%, in line with the rest with our tobacco coverage as we think the low price elasticity of cigarettes offsets Altria’s single-market exposure, the main reason we saw higher systemic risk before. Our revised valuation implies a 2024 price/adjusted earnings ratio of 11.5 times, enterprise value/adjusted EBITDA of 8.5 times, and 7% dividend yield. These multiples are near the middle of the tobacco peer group given Altria’s pureplay US exposure—an attractive market but one facing headwinds to growth.