Should You Bet on Altria Stock After Its Q3 Earnings Report?

Altria Group, Inc. (MO) delivered a steady third-quarter 2025 performance, reflecting its resilience amid a challenging operating environment. Despite continued volume declines in the traditional cigarette segment, Altria’s strategic focus on pricing power, cost discipline and investment in smoke-free alternatives helped sustain its profitability. Altria’s results highlight its continued commitment to balancing long-term growth initiatives with strong shareholder returns.Since reporting results on Oct. 30, 2025, Altria’s shares have slipped 5.7%, continuing its downward trend over the past three months. Over this period, Altria declined 11.5%, underperforming both the broader Zacks Tobacco industry, which slipped 8.1%, and the Zacks Consumer Staples sector, which retreated 6.5%. In contrast, the S&P 500 advanced 7.7% during the same timeframe.Performance among Altria’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 and British American Tobacco declined 7% and 3.7%, respectively, while Turning Point Brands managed a modest 1.5% gain.Altria’s Three Months Price PerformanceImage Source: Zacks Investment ResearchMO’s Q3 Earnings: Solid Profits Amid Volume PressureAltria’s third-quarter 2025 results reflected steady execution and margin strength despite ongoing industry headwinds. Adjusted earnings rose 3.6% year over year to $1.45, supported by higher adjusted operating companies income (“OCI”) and fewer shares outstanding. However, net revenues slipped 3% to $6.07 billion (down 1.7% net of excise taxes), primarily due to lower net revenues in the smokeable and oral tobacco products segments. While the top line faced pressure, Altria’s underlying business remained resilient. Its robust pricing power and disciplined expense management helped preserve margins, with adjusted OCI in the Smokeable Products segment up 0.7% and margin expanding to 64.4%. These strong operating results have allowed Altria to continue rewarding shareholders even amid a soft revenue environment.MO Strengthens Shareholder Returns Through Dividend and BuybackAltria reaffirmed its commitment to delivering consistent shareholder value during the third quarter. In August 2025, management increased the regular quarterly dividend by 3.9% to $1.06 per share, marking the company’s 60th dividend increase in 56 years. This milestone underscores Altria’s long-standing track record of returning cash to shareholders and the resilience of its business model through changing industry dynamics. In addition, management expanded the existing share repurchase program to $2 billion through 2026, up from the prior $1 billion authorization, reflecting confidence in the company’s earnings stability and cash-flow generation.MO Builds Smoke-Free Momentum Led by on!The Oral Tobacco Products segment also remained a key earnings driver. While revenues declined 4.6%, the segment’s adjusted OCI margin improved to 69.2%, reflecting favorable pricing and cost control. Altria’s on! nicotine pouch brand achieved a 0.7% increase in shipment volumes to over 42.2 million cans, supported by steady retail demand. The launch of on! PLUS, a next-generation pouch product available in select U.S. markets, marks another step in the company’s strategy to strengthen its smoke-free portfolio and capture growth in modern oral nicotine. Beyond oral nicotine, the company is broadening its smoke-free ecosystem through new technologies and strategic alliances.In addition, a new collaboration with KT&G Corporation aims to explore global opportunities in modern oral products and non-nicotine innovations. This partnership combines KT&G’s product expertise with Altria’s market experience, supporting the company’s long-term goal of transitioning its portfolio toward a smoke-free future.What to Expect From Altria in 2025?Altria’s near-term outlook remains cautious but stable. Management narrowed its 2025 adjusted earnings guidance to $5.37-$5.45, representing 3.5-5% growth from 2024. Continued pricing strength and cost discipline should help offset volume declines, though regulatory uncertainty and a slow industry recovery may keep earnings momentum moderate in the coming quarters.Is MO Stock’s Discounted Valuation Good?Altria is currently trading at a notable discount compared with industry peers and the broader market, making it an appealing option for value-focused investors. MO trades at a forward 12-month price-to-earnings (P/E) ratio of 10.53X, which is significantly lower than the industry average of 14.17X and the S&P 500’s average of 23.66X. This relative undervaluation is further supported by Altria’s Value Score of B.By comparison, peers such as Philip Morris and Turning Point Brands trade at much higher multiples of 19.02X and 26.82X, respectively, while British American Tobacco also trades slightly above Altria at 11.69X.MO P/E Ratio (Forward 12 Months)Image Source: Zacks Investment ResearchInvestor Takeaway for MOAltria’s post-earnings pullback may seem concerning at first glance, but its core fundamentals remain largely intact. The company continues to navigate an evolving landscape marked by inflationary pressures, regulatory uncertainty and category disruption, while maintaining pricing power and executing on its long-term strategy to transition toward smoke-free products. With its defensive business model, strong cash flows and disciplined management, Altria remains a steady option for value-oriented investors. However, given persistent volume declines and limited near-term growth catalysts, the stock appears fairly valued at current levels, supporting a hold stance until clearer signs of momentum emerge.At present, Altria carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Altria Group, Inc. (MO): Free Stock Analysis Report Philip Morris International Inc. (PM): Free Stock Analysis Report British American Tobacco p.l.c. (BTI): Free Stock Analysis Report Turning Point Brands, Inc. (TPB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks