Altria forecasts modest earnings growth for 2025

RICHMOND, Va. - Altria Group , Inc. (NYSE: NYSE:MO), the $89 billion tobacco giant, today announced its financial results for the fourth quarter of 2024 and provided its full-year earnings guidance for 2025. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value calculations. The company expects adjusted diluted earnings per share (EPS) for 2025 to range from $5.22 to $5.37, indicating a growth rate of 2% to 5% from the $5.12 base in 2024.

Despite facing challenges in the e-vapor market due to the proliferation of illicit disposable e-vapor products, Altria delivered a reported diluted EPS of $1.79 for the fourth quarter, a 54.3% increase compared to the same period in 2023. The adjusted diluted EPS for the quarter rose by 9.3% to $1.29. With impressive gross profit margins of nearly 70% and a P/E ratio of 8.9, InvestingPro data reveals 12 additional key insights about Altria’s financial health and market position.

For the full year, net revenues declined by 1.9% to $24.018 billion, while revenues net of excise taxes saw a marginal decrease of 0.3% to $20.444 billion. The reported diluted EPS for the year stood at $6.54, up 43.1% from 2023, primarily driven by the gain on the assignment of the IQOS Tobacco Heating System commercialization rights to Philip Morris International Inc (NYSE:PM). (PMI), favorable tax items, and fewer shares outstanding.

Altria’s NJOY e-vapor products experienced growth, with consumables shipment volume increasing by 15.3% and device shipment volume by 22.2% for the fourth quarter compared to the previous year. However, the U.S. International Trade Commission ( ITC (NSE:ITC)) issued a final determination in favor of JUUL Labs, Inc. against NJOY, which may impact the company’s future operations if the decision is not overturned.

The company also completed its $3.4 billion share repurchase program in the fourth quarter and authorized a new $1 billion share repurchase program, expected to be completed by December 31, 2025.

Regarding its 2028 Enterprise Goals, Altria reported a reported diluted EPS compounded annual growth rate (CAGR) of 43.2% and an adjusted diluted EPS CAGR of 2.9% from the 2022 base. The company also increased its dividend by 4.1% in 2024, maintaining its impressive track record of 54 consecutive years of dividend payments. Currently offering a substantial 7.75% dividend yield, Altria continues to reward shareholders through both dividends and share repurchases. Detailed dividend analysis and future projections are available through InvestingPro’s comprehensive research reports.

The financial guidance for 2025 includes anticipated cost savings from Altria’s Optimize & Accelerate initiative and assumes limited impact on combustible and e-vapor product volumes from enforcement efforts against illicit e-vapor products. The guidance also contemplates planned investments in support of Altria’s vision of leading the transition of adult smokers to smoke-free products.

This news article is based on a press release statement from Altria Group, Inc.

In other recent news, British American Tobacco (NYSE:BTI), Altria Group, and Philip Morris International saw their shares climb following the Trump administration’s decision to withdraw a proposal to ban menthol cigarettes. This development is seen as a positive for tobacco companies, potentially saving them from significant market loss. Meanwhile, the U.S. Food and Drug Administration authorized the marketing of 20 ZYN nicotine pouch products for Philip Morris International, marking the first time nicotine pouches have received such approval.

Citi analysts maintained a Neutral rating on Altria Group, citing caution for the 2025 outlook due to worsening trends in U.S. combustible product declines. Morgan Stanley (NYSE:MS) initiated coverage on Altria with an Equalweight rating, predicting modest corporate revenue declines and earnings per share growth. BofA Securities upgraded Altria’s stock from Neutral to Buy, anticipating potential positive earnings revisions.

The Biden administration is reportedly planning to propose a restriction on the amount of nicotine in traditional cigarettes, a development that could impact both Philip Morris and Altria. Despite facing business challenges and a decline in the cigarette market share, Altria is expected to meet its EPS growth target of 2-5% for 2024 and 2025. These are the latest developments in the tobacco industry.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.