Altria Trades at a Bargain: Is it a Good Time to Buy the Stock?

Altria Group, Inc. MO is currently trading at an attractive discount compared to its industry peers and the broader market, making it a potential value pick for long-term investors. MO stock trades at a forward 12-month price-to-earnings (P/E) ratio of 10.81, notably lower than the industry average of 15.73 and the S&P 500’s average of 21.85. Backing this valuation, the stock holds a Zacks Value Score of B, underscoring its strong fundamentals and appealing valuation profile.

When compared to leading competitors, Altria’s relative undervaluation stands out even more. Philip Morris International Inc. PM and Turning Point Brands TPB trade at significantly higher forward P/E ratios of 21.18 and 21.07, respectively. Meanwhile, British American Tobacco p.l.c. BTI trades at a slightly lower P/E of 10.49, still comparable to Altria.

Despite favorable valuations, MO's recent stock performance suggests a possible entry point. The stock has gained 1.8% over the past three months, underperforming the industry average growth of 17.1%, the S&P 500's 5.4% return, and competitors like Philip Morris (+19%), Turning Point Brands (+30.8%), and British American Tobacco (+18.5%).

Altria’s Price Performance

As of June 17, 2025, Altria stock closed at $58.99, approximately 3.7% below its 52-week high of $61.26 (hit on May 7, 2025). Importantly, MO is trading above both its 50-day and 200-day moving averages, signaling underlying bullish momentum and investor confidence.

MO Trades Above 50 & 200-Day Moving Averages

With a combination of undervaluation, solid fundamentals, and potential technical upside, Altria may offer a compelling opportunity for value-focused investors looking to capitalize on the evolving tobacco landscape.

Inside Altria’s Growth Strategy

Altria is accelerating its shift toward a smoke-free future, with its oral nicotine pouch brand on! emerging as a key growth engine. In the first quarter of 2025, on! shipments surged 18% year over year, surpassing 39 million cans. The brand gained 1.8 share points in the oral tobacco category, reaching 8.8%, while also increasing its nicotine pouch market share to 17.9%. These gains came despite higher retail pricing and optimized promotional spending, underscoring on!’s strong brand equity and consumer loyalty. This momentum reflects Altria’s successful efforts to align its product portfolio with evolving consumer demand for reduced-risk products (RRPs). Similar to Altria, major tobacco companies such as Philip Morris, British American Tobacco and Turning Point Brands are also accelerating their transition toward smoke-free alternatives.

Meanwhile, pricing power remains a critical pillar of Altria’s growth strategy. The company continues to leverage strategic price increases to offset soft volumes in traditional cigarette segments and navigate a challenging regulatory landscape. In the first quarter, higher pricing supported revenue growth across both the Smokeable Products and Oral Tobacco segments. The company's ability to sustain profitability — even amid cigarette volume declines — demonstrates its pricing resilience. Altria projects 2025 adjusted earnings per share (EPS) between $5.30 and $5.45, reflecting up to 5% year-over-year growth from a base of $5.19 in 2024 (excluding intangible asset amortization), reinforcing the strength of its operating model.

To drive long-term value creation, Altria has introduced its “Optimize & Accelerate” initiative, a forward-looking program designed to improve speed, agility and cost efficiency. The initiative enables the company to reinvest in innovation and support its smoke-free transformation. In addition, Altria is actively retooling its e-vapor platform through NJOY, following recent regulatory setbacks. Altria remains committed to offering science-based, regulated vapor products that meet the evolving preferences of adult consumers. These strategic moves position Altria to lead the next generation of nicotine innovation.

Estimate Revisions Favoring MO Stock

Reflecting positive sentiment around Altria, the Zacks Consensus Estimate for EPS has seen upward revisions. Over the past 30 days, the estimate for the current year has increased by 4 cents to $5.39, while the estimate for next year has risen by a cent to $5.55. These upward revisions signal improving sentiment among analysts. Based on current projections, MO is expected to deliver year-over-year EPS growth of 5.3% this year and 3% next year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

How Should You Approach MO Stock?

Given Altria’s attractive valuation, solid earnings outlook, and strategic push toward smoke-free products, the stock appears well-positioned for value-focused investors seeking stable returns in a transforming industry. While regulatory headwinds and market competition persist, MO’s strong pricing power, growing presence in reduced-risk products, and favorable analyst revisions suggest a compelling long-term opportunity in the tobacco space. At present, Altria carries a Zacks Rank #2 (Buy). 

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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