Altria Rises 12% in 3 Months: Should You Buy, Sell or Hold the Stock?

Altria Group, Inc. (MO) has seen strong gains as it continues to strengthen its presence in the smoke-free product segment amid declining cigarette volumes. Over the past three months, the stock has risen 11.8%, outperforming the S&P 500’s 8% growth. While the Zacks Consumer Staples sector and the broader Zacks Tobacco industry experienced declines of 4.3% and 4.8% respectively, MO’s strong performance stands out amid broader weakness.

MO Price Performance vs. Industry, S&P 500 & Sector

Performance among MO’s peers, Philip Morris International Inc. (PM), Turning Point Brands, Inc. (TPB) and British American Tobacco p.l.c. (BTI), has been mixed over the past three months. Philip Morris International shares have declined 12.1% and British American Tobacco has fallen 0.7%. Meanwhile, Turning Point Brands has delivered strong gains, rising 16.2%, reflecting varied momentum across the sector.

As of the latest trading session, Altria closed at $65.40, just 4.7% below its 52-week high of $68.60 reached on Aug. 22, 2025. The stock is trading above the 200-day moving average. Trading above these averages signals bullish sentiments.

MO’s recent gains show how its strategies and market moves are paying off. Even as parts of the tobacco sector struggled, the company has found opportunities in the smoke-free product segment, showing it can grow and create value for shareholders.

Altria’s Winning Strategies

As consumers increasingly shift toward reduced-risk products due to health concerns related to smoking, MO is capitalizing on this trend by strengthening its presence in the smoke-free segment. This focus positions the company well in an evolving market and supports its long-term growth prospects.

Altria’s strong earnings performance has been a key driver of its recent rally. In the second quarter of 2025, the company’s adjusted earnings per share (EPS) rose 8.3% year over year to $1.44, supported by higher pricing, operational efficiencies and share repurchases.

Revenues, net of excise taxes, remained steady at $5.29 billion, highlighting the strength of Altria’s diversified portfolio and disciplined execution. Reflecting these results, management raised the lower end of its 2025 adjusted EPS guidance to $5.35-$5.45, representing an expected growth rate of 3-5%.

The impressive rally in MO’s oral tobacco segment was a key driver, led by the on! nicotine pouch brand. Shipments of on! rose 26.5% year over year in the second quarter to 52.1 million cans, lifting its retail share to 8.7%. Successful marketing campaigns and brand activations drove a 10.9% rise in adjusted operating income, reflecting MO’s steady progress in expanding its smoke-free portfolio.

Altria’s smokeable products segment has shown notable resilience, supported by disciplined brand management and effective pricing strategies. Adjusted operating income in the second quarter grew 4.2%, with margins widening 290 basis points to 64.5%.

Marlboro maintained its leadership in the premium category, expanding its share to 59.5% of the segment. This performance demonstrates the enduring strength of Altria’s flagship brand and its ability to protect profitability in a challenging market environment.

Altria’s Valuation Picture

Altria is currently trading at an attractive valuation compared with the broader industry. The stock's forward 12-month P/E ratio stands at 11.81, well below the industry average of 14.51, highlighting its appeal as a value opportunity. By comparison, peers such as Philip Morris and Turning Point Brands trade at much higher multiples of 19.39 and 24.65, respectively, while British American Tobacco sits just below at 10.68.

MO P/E Ratio (Forward 12 Months)

Here’s Why Altria Can Be an Attractive Play

Altria’s recent gains reflect not just strong price momentum but also solid fundamentals, strategic execution and a focus on creating shareholder value. The company’s resilient pricing in its core smokeable products, coupled with growth in its smoke-free portfolio and disciplined financial management, supports its long-term prospects.

Trading at a relative discount to peers, Altria presents a compelling mix of stability and growth potential. For investors seeking exposure to the tobacco sector, this Zacks Rank #2 (Buy) stock stands out as a strong opportunity for both value and income. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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