Altria Narrows 2025 EPS Outlook: Is Margin Growth Peaking?

Altria Group, Inc.’s (MO) move to narrow its 2025 adjusted earnings per share outlook to $5.37-$5.45, up slightly at the low end from the previous $5.35-$5.45 on its latest earnings call, reflects continued operational discipline and a clearer view of the factors influencing margin performance. The update suggests that expected margin contributions are becoming more defined as the year progresses.

The smokeable segment delivered another strong result in the third quarter of 2025, with adjusted OCI margins of 64.4%, an increase of 1.3 percentage points, driven by pricing and lower per-unit settlement charges. The company reported that, when adjusted for calendar differences and trade inventory movements, its domestic cigarette volumes declined an estimated 9% in the third quarter compared with an estimated 8% decrease at the industry level. Growing participation in the discount segment and elevated promotional spending remain important dynamics that may shape the trajectory of future margin expansion.

In oral tobacco, margins rose to 69.2%, up 2.4 percentage points, though mix shifts tied to on! growth and elevated promotional activity shape the degree of further margin progression. Management also noted that earnings per share growth is expected to moderate in the fourth quarter as the company laps temporary 2024 tailwinds, such as the lower share count and the expiration of the MSA legal fund.

Overall, the narrowed 2025 guidance reflects increased precision around Altria’s expected earnings performance. Segment margins remain healthy and continue to improve, though recent trends point to a steadier, more measured pace of expansion compared with earlier periods.

Altria and Its Competitors: A Look at Margin and Earnings Shifts

Philip Morris International Inc. (PM) delivered clear margin expansion in the third quarter of 2025, reporting an adjusted operating income margin of 43.1%, up 1.2 percentage points from the prior year. This improvement was supported by strong smoke-free growth, with Philip Morris’ smoke-free gross profit rising 19.5% year over year. Philip Morris also raised its full-year adjusted earnings per share guidance to $7.46-$7.56 from $7.43-$7.56, reflecting strong operating performance and favorable financial items.

Turning Point Brands, Inc. (TPB) posted solid margin gains in the third quarter of 2025, with gross margin in the Stoker’s segment rising to 60.2%, an expansion of 440 basis points year over year. Supported by margin improvements and strong Modern Oral momentum, Turning Point Brands is demonstrating progress in the fast-growing modern oral category. Turning Point Brands highlighted strong Modern Oral momentum, which grew 627.6% and contributed meaningfully to profitability.

Altria’s Price Performance, Valuation & Estimates

Shares of Altria have lost 10% in the past month compared with the industry’s decline of 1.7%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 10.48X, down from the industry’s average of 14.17X.

The Zacks Consensus Estimate for MO’s 2025 earnings per share has inched up 1 cent in the past 30 days to $5.44, while the same for 2026 has slipped 1 cent to $5.56.

Altria currently carries a Zacks Rank #3 (Hold). 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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