Street Calls of the Week
Investing.com - Stifel has raised its price target on Altria (NYSE:MO) to $72.00 from $65.00 while maintaining a Buy rating on the tobacco company’s stock. The stock currently trades at an attractive P/E ratio of 13x and offers a substantial 6% dividend yield, according to InvestingPro data.
The price target increase follows Altria’s board of directors approving a 3.9% increase in its quarterly dividend to $1.06 from $1.02 previously, representing an annual payout of $4.24 and a 78% payout ratio based on fiscal year 2025 estimated earnings per share. InvestingPro data shows that Altria has maintained dividend payments for an impressive 55 consecutive years, demonstrating exceptional commitment to shareholder returns.
Since the company’s break-up in 2008, Altria has raised its dividend every year at a compound annual growth rate of nearly 8%, slightly outpacing its consistent EPS growth profile over that period.
Stifel expects continued mid-single digit dividend increases in the medium term, supported by strong free cash flow generation from the tobacco giant.
The investment firm believes Altria’s strong dividend payout, free cash flow generation, share repurchases, and consistent EPS growth outlook provide support for potential upside in the stock.
In other recent news, Altria Group reported its second-quarter 2025 earnings, surpassing analysts’ expectations with an adjusted diluted earnings per share of $1.44, compared to a forecast of $1.38. The company’s revenue also exceeded expectations, reaching $6.1 billion, significantly higher than the anticipated $5.2 billion. Additionally, Altria’s Board of Directors approved a 3.9% increase to its regular quarterly dividend, raising it to $1.06 per share from the previous $1.02 per share. This marks the 60th increase in the company’s dividend history. Furthermore, BofA Securities raised its price target on Altria to $64.00 from $63.00, maintaining a Buy rating. This adjustment follows Altria’s demonstration of operational resilience despite economic challenges and high levels of illicit trade. These developments reflect positively on Altria’s ongoing financial performance and strategic initiatives.
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