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Investing.com - UBS has lowered its price target on Altria (NYSE:MO) to $61.00 from $68.00 while maintaining a Neutral rating, following the tobacco company’s third-quarter results. This adjustment comes as the stock has fallen nearly 12% over the past week, according to InvestingPro data, though it remains up about 15% year-to-date. Despite the recent pullback, InvestingPro’s Fair Value assessment suggests Altria may be undervalued at its current trading price of $57.13.
Altria reported better-than-expected cigarette volumes in the third quarter of 2025, with underlying volumes declining 9.0% compared to a 10.5% drop in the second quarter. The improved performance was primarily driven by the lower-priced Basic brand, while Marlboro’s market share declined sequentially.
The company’s smokeable segment faced price and mix challenges due to the Basic brand’s growth and increased state excise taxes. Meanwhile, Altria’s smokeless tobacco business underperformed expectations, with volume share dropping 610 basis points year-over-year.
UBS noted that competitive activity has increased in the nicotine pouch category as Altria launches its on! Plus product in three states. The firm expressed concern about Altria’s historical mixed execution in new product categories.
The analyst highlighted that Altria’s recent partnership with KT&G could provide benefits from duty drawbacks, potentially offering greater flexibility to deliver mid-single-digit EPS growth over three years. UBS projects a dividend yield of 7.6% for fiscal year 2026 based on the current share price of $57.10.
In other recent news, Altria Group, Inc. has announced a 3.9% increase in its quarterly dividend, marking the 60th increase in its history. The new dividend is set at $1.06 per share, up from $1.02, and will be payable on October 10, 2025, to shareholders of record as of September 15, 2025. This decision reflects the company’s ongoing commitment to returning value to its shareholders. In light of this, Stifel has raised its price target for Altria to $72.00 from $65.00, maintaining a Buy rating, citing the dividend growth as a positive factor. Similarly, BofA Securities also increased its price target for Altria to $72.00 from $64.00, while maintaining a Buy rating, highlighting the strength of the tobacco sector. Both firms acknowledge the significant performance of tobacco and nicotine stocks, which have outperformed the broader market this year. These developments underscore Altria’s strategic financial decisions and the positive outlook from analysts.
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