Should Altria Stock Be in Your Portfolio Ahead of Q1 Earnings?

Altria Group, Inc. MO is slated to report its first-quarter 2025 earnings on April 29 before the market opens.

The Zacks Consensus Estimate for first-quarter revenues stands at $4.6 billion, indicating a 1.7% decline from the same period last year. Although the consensus mark for earnings has moved down by 2 cents in the past 30 days to $1.17 per share, the projection indicates 1.7% growth from the year-ago quarter’s reported figure. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)

Altria has a trailing four-quarter average negative earnings surprise of 0.2%. Nevertheless, in the last reported quarter, the company’s bottom line surpassed the Zacks Consensus Estimate by a margin of 1.6%.

What the Zacks Model Predicts About MO’s Q1 Earnings

As investors prepare for Altria’s first-quarter announcement, the question looms regarding earnings beat or miss. Our proven model does not conclusively predict an earnings beat for MO this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Altria has an Earnings ESP of -2.69% and carries a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Altria Group, Inc. Price and EPS Surprise

Altria Group, Inc. price-eps-surprise | Altria Group, Inc. Quote

What’s Shaping Altria’s Q1 Earnings?

As Altria prepares to announce its first-quarter results, its strategic transformation toward smoke-free products will be in focus. The company has been actively expanding its portfolio of reduced-risk offerings, such as NJOY e-vapor products and on! nicotine pouches, to meet the growing demand for alternatives to traditional cigarettes amid increasing health consciousness. Supporting this transition is Altria’s newly launched “Optimize & Accelerate” initiative, aimed at modernizing internal operations and accelerating progress toward its smoke-free vision.

Strength in smoke-free products is expected to have positively influenced Altria’s first-quarter performance. However, significant investments in research, development and marketing to support this shift may have weighed on profitability.

Despite these forward-looking initiatives, Altria remains heavily reliant on its Smokeable Products segment, which contributed 88.1% of total revenues in fourth-quarter 2024. This core segment continues to face mounting pressure due to industry-wide cigarette volume declines. The downturn is attributed to persistent macroeconomic challenges, including inflationary headwinds, reduced discretionary spending and the rapid rise of illegal disposable e-vapor products, which have disrupted the traditional cigarette market. Still, the company’s strong pricing power is likely to have provided some offset, helping to support its margins amid revenue headwinds in the to-be-reported quarter.

Altria’s Valuation Picture

From a valuation perspective, Altria shares are trading at a discount relative to the Zacks Tobacco industry average. With a forward 12-month price-to-earnings ratio of 10.99, below the industry’s average of 14.86, the stock offers compelling value for investors seeking exposure to the sector.

This valuation gap becomes even more pronounced when compared to key competitors like Philip Morris International Inc. PM (P/E of 22.74) and Turning Point Brands, Inc. TPB (P/E of 16.72). Meanwhile, British American Tobacco p.l.c. BTI is trading at a P/E ratio of 9.23.

MO’s Price Performance

Over the past three months, Altria stock has delivered a return of 9.8% compared with the industry’s gain of 20.8%. In comparison, the S&P 500 has declined by 11% during the same period, highlighting Altria’s relative strength amid broader market weakness. The company also outperformed some key peers, including Turning Point Brands, which fell 2.1%, and British American Tobacco, which rose 7.2%. However, Philip Morris led the pack with a 30.4% gain in the last three months.

Altria’s Stock Analysis: Best Moves for Investors Now

Altria’s combination of attractive valuation, defensive sector positioning and decent relative performance makes it a compelling pick for long-term investors seeking exposure to the tobacco sector. While not the top performer in recent months, its reliable returns offer portfolio stability. Existing shareholders may choose to hold their positions.

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

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