TLDR
- Altria (MO) closed at $66.80, up 26.9% over the past year and 91.9% over five years
- DCF analysis puts intrinsic value at $99.44 per share, implying a 32.8% discount to current price
- P/E sits at 16.12x — below the Fair Ratio of 23.27x, also screening as undervalued
- Quarterly dividend of $1.06 per share announced, yielding 6.3%, payable April 30
- Analyst consensus is “Hold” with an average target price of $65.75
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Altria Group (MO) has had a strong run. The stock closed at $66.80, posting gains of 16.6% year to date and 26.9% over the past year. Over five years, it has returned 91.9%.
That kind of performance naturally raises a question: how much is already priced in?
The stock opened at $67.52 on Friday. Its 50-day moving average sits at $66.41, and the 200-day at $62.59. The 12-month range runs from $54.70 to $70.51.
For Q4, MO reported EPS of $1.30, just missing the consensus estimate of $1.32. Revenue came in at $5.08 billion, slightly ahead of the $5.02 billion estimate.
Analysts expect full-year EPS of $5.32 for the current fiscal year.
Valuation Models Point to Upside
A DCF model using a 2-Stage Free Cash Flow to Equity approach puts Altria’s intrinsic value at $99.44 per share. That’s based on recent free cash flow of $9.11 billion over the last twelve months, with projected FCF of $9.31 billion in 2028.
Against the current price of $66.80, the model implies a 32.8% discount — screening the stock as undervalued.
The P/E picture tells a similar story. MO trades at 16.12x earnings. That’s above the tobacco industry average of 12.27x but below the peer average of 18.63x. Simply Wall St’s proprietary Fair Ratio for MO is 23.27x, suggesting room to the upside on this measure too.
Altria carries a market cap of $112.85 billion, a PEG ratio of 2.85, and a beta of 0.41 — relatively low volatility compared to the broader market.
Dividend and Institutional Activity
Altria announced a quarterly dividend of $1.06 per share, to be paid April 30. The ex-dividend date was March 25. That works out to an annualized $4.24 per share and a yield of 6.3%.
The dividend payout ratio currently stands at 103.16%.
On the institutional side, Westbourne Investments took a new position worth roughly $995,000 in Q4, buying 17,261 shares. Several other funds added to existing positions, including V Square Quantitative Management, Yarger Wealth Strategies, and Powers Advisory Group. MH & Associates Securities Management opened a new stake worth around $2.72 million.
Institutional investors now own 57.41% of the stock.
Analyst Ratings and Insider Moves
Wall Street is split. UBS holds a buy rating with a $74 target. Citigroup is neutral at $65. Barclays rates it underweight at $63. Jefferies has an underperform rating with a $50 target.
The consensus sits at “Hold” with an average target of $65.75 — just below where the stock is currently trading.
On the insider side, SVP Charles N. Whitaker sold 27,908 shares on March 5 at an average of $67.57, netting roughly $1.89 million. That trimmed his position by 13.37%. He still holds 180,869 shares.
Corporate insiders own 0.08% of the stock.
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