MO
MO
Accumulate 2026-05-06
Model
DDM
Price at Report
$72.79
Base IV
$69.09
Bear IV
$63.99
Bull IV
$76.92
Entry Zone: 69-69 · Sell Above: 80
Bore Family Office
Valuation Report — Altria Group Inc. (MO) • May 6, 2026
3-Stage DDM (Ke) • Discount Rate: 8.50% • Current Price: $72.79
Prepared by Lurch • Bore Family Office • Data: Finnhub, StockAnalysis.com, S&P Global Market Intelligence
🏢 Business Overview
Altria Group is the leading U.S. tobacco company, owning brands including Marlboro, Copenhagen, and nicotine products through its stake in Cronos Group. The company operates in a highly regulated, cash-generative industry with pricing power and a loyal customer base. While long-term volume headwinds exist from smoking decline, Altria has maintained earnings through price increases and share repurchases.
| Business Segment | Revenue | % of Total | YoY Growth | Margin | Notes |
|---|---|---|---|---|---|
| Smokeable Products | $17,800M | 87% | -250.0% | — | Marlboro and cigarette portfolio; volume decline offset by pricing |
| Smokeless Products | $2,400M | 12% | +850.0% | — | Copenhagen and snus; high-margin growth segment |
| Other | $200M | 1% | +500.0% | — | Cronos Group, nicotine vapes, and international |
| Blended Growth Rate | — | 100% | -113.8% | — | Weighted avg across segments |
📊 Business Lifecycle Stage
Stage 1
Startup
Startup
Stage 2
Hyper Growth
Hyper Growth
Stage 3
Self Funding
Self Funding
Stage 4
Operating Leverage
Operating Leverage
Stage 5
Capital Return
Capital Return
Stage 6
Decline
Decline
Stage 5 — Maturity/Stability: Mature business returning capital via dividends and buybacks. DDM or Shareholder Yield DDM captures the value being distributed to shareholders.
Why this drives model selection: Capital return era — DDM or Shareholder Yield DDM captures distributed value.
📊 Financial Snapshot
| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue ($M) | $26,013 | $25,096 | $24,483 | $24,018 | $23,279 |
| Rev YoY Growth | — | -3.5% | -2.4% | -1.9% | -3.1% |
| Gross Margin | 53.8% | 56.8% | 58.3% | 59.8% | 62.5% |
| EBITDA ($M) | $11,804 | $12,145 | $11,819 | $11,527 | $10,165 |
| EBITDA Margin | 45.4% | 48.4% | 48.3% | 48.0% | 43.7% |
| Operating Income ($M) | $11,560 | $11,919 | $11,547 | $11,241 | $9,899 |
| Operating Margin | 44.4% | 47.5% | 47.2% | 46.8% | 42.5% |
| Net Income ($M) | $2,475 | $5,764 | $8,130 | $11,264 | $6,947 |
| Net Margin | 9.5% | 23.0% | 33.2% | 46.9% | 29.8% |
| EPS (diluted) | $1.34 | $3.19 | $4.57 | $6.54 | $4.12 |
| Free Cash Flow ($M) | $8,236 | $8,051 | $9,091 | $8,611 | $9,074 |
| Annual DPS | $3.520 | $3.680 | $3.840 | $4.000 | $4.160 |
| Total Debt ($M) | $28,044 | $26,680 | $26,233 | $24,926 | $25,709 |
💹 Capital Return & Share Count Analysis
Net Share Change
-13.8% (2016→2025)
📉 Net reduction — buybacks exceed issuances
| Year | Diluted Shares (M) | YoY Change | Buyback Spend ($M) | Buyback Yield |
|---|---|---|---|---|
| 2016 | 1952.0M | — | $1,030 | 0.7% |
| 2017 | 1921.0M | -1.6% | $2,917 | 2.1% |
| 2018 | 1887.0M | -1.8% | $1,673 | 1.2% |
| 2019 | 1869.0M | -1.0% | $845 | 0.6% |
| 2020 | 1858.0M | -0.6% | — | — |
| 2021 | 1845.0M | -0.7% | $1,675 | 1.2% |
| 2022 | 1804.0M | -2.2% | $1,825 | 1.4% |
| 2023 | 1777.0M | -1.5% | $1,000 | 0.8% |
| 2024 | 1718.0M | -3.3% | $3,400 | 2.7% |
| 2025 | 1683.0M | -2.0% | $1,000 | 0.8% |
Altria has repurchased ~$15.4B in shares over the past decade, reducing share count by ~14%. Buybacks are systematic and part of management’s stated capital return framework, though pacing varies year-to-year based on cash flow and alternatives.
📈 DDM Scenarios
$64
🔴 Bear
$69
📊 Base
$77
🚀 Bull
$72.79
Current Price
$66
Analyst Avg PT
| Scenario | Stage 1 (Yrs 1–5) | Stage 2 (Yrs 6–10) | Terminal g | Ke | Intrinsic Value | vs Price |
|---|---|---|---|---|---|---|
| 🔴 Bear | 1.5% | 2.0% | 1.8% | 8.50% | $64 | ▼12.1% |
| 📊 Base | 2.5% | 2.5% | 2.0% | 8.50% | $69 | ▼5.1% |
| 🚀 Bull | 3.5% | 3.0% | 2.5% | 8.50% | $77 | ▲5.7% |
📋 Full 10-Year Projection Tables
Bear Scenario
Stage 1: 1.5% | Stage 2: 2.0% | Terminal: 1.8%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $4.304 | $3.966 | $3.97 |
| Year 2 | Stage 1 | $4.368 | $3.711 | $7.68 |
| Year 3 | Stage 1 | $4.434 | $3.471 | $11.15 |
| Year 4 | Stage 1 | $4.500 | $3.247 | $14.40 |
| Year 5 | Stage 1 | $4.568 | $3.038 | $17.43 |
| Year 6 | Stage 2 | $4.659 | $2.856 | $20.29 |
| Year 7 | Stage 2 | $4.752 | $2.685 | $22.97 |
| Year 8 | Stage 2 | $4.847 | $2.524 | $25.50 |
| Year 9 | Stage 2 | $4.944 | $2.373 | $27.87 |
| Year 10 | Stage 2 | $5.043 | $2.230 | $30.10 |
| Terminal | — | TV=$76.62 | PV(TV)=$33.89 (53% of IV) | $63.99 |
| Intrinsic Value | — | — | PV(Divs) $30.10 + PV(TV) $33.89 | $63.99 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (1.8%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $76.62. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $33.89). Intrinsic value = PV of all dividends ($30.10) + PV of terminal value ($33.89) = $63.99 per share.
Base Scenario
Stage 1: 2.5% | Stage 2: 2.5% | Terminal: 2.0%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $4.346 | $4.006 | $4.01 |
| Year 2 | Stage 1 | $4.455 | $3.784 | $7.79 |
| Year 3 | Stage 1 | $4.566 | $3.575 | $11.36 |
| Year 4 | Stage 1 | $4.680 | $3.377 | $14.74 |
| Year 5 | Stage 1 | $4.797 | $3.190 | $17.93 |
| Year 6 | Stage 2 | $4.917 | $3.014 | $20.95 |
| Year 7 | Stage 2 | $5.040 | $2.847 | $23.79 |
| Year 8 | Stage 2 | $5.166 | $2.690 | $26.48 |
| Year 9 | Stage 2 | $5.295 | $2.541 | $29.02 |
| Year 10 | Stage 2 | $5.428 | $2.401 | $31.42 |
| Terminal | — | TV=$85.17 | PV(TV)=$37.67 (55% of IV) | $69.09 |
| Intrinsic Value | — | — | PV(Divs) $31.42 + PV(TV) $37.67 | $69.09 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.0%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $85.17. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $37.67). Intrinsic value = PV of all dividends ($31.42) + PV of terminal value ($37.67) = $69.09 per share.
Bull Scenario
Stage 1: 3.5% | Stage 2: 3.0% | Terminal: 2.5%
| Period | Stage | DPS / Dist. | PV of DPS | Cumulative IV |
|---|---|---|---|---|
| Year 1 | Stage 1 | $4.388 | $4.045 | $4.04 |
| Year 2 | Stage 1 | $4.542 | $3.858 | $7.90 |
| Year 3 | Stage 1 | $4.701 | $3.680 | $11.58 |
| Year 4 | Stage 1 | $4.865 | $3.511 | $15.09 |
| Year 5 | Stage 1 | $5.036 | $3.349 | $18.44 |
| Year 6 | Stage 2 | $5.187 | $3.179 | $21.62 |
| Year 7 | Stage 2 | $5.342 | $3.018 | $24.64 |
| Year 8 | Stage 2 | $5.503 | $2.865 | $27.51 |
| Year 9 | Stage 2 | $5.668 | $2.720 | $30.23 |
| Year 10 | Stage 2 | $5.838 | $2.582 | $32.81 |
| Terminal | — | TV=$99.73 | PV(TV)=$44.11 (57% of IV) | $76.92 |
| Intrinsic Value | — | — | PV(Divs) $32.81 + PV(TV) $44.11 | $76.92 |
How the price per share is derived: Each year's projected dividend is discounted back at Ke (8.50%) to get its present value. After Year 10, dividends are assumed to grow at the terminal rate (2.5%) in perpetuity — the Gordon Growth formula gives a terminal value of DPS11 / (Ke − gT) = $99.73. That terminal value is then discounted back 10 years to today's dollars (PV of TV = $44.11). Intrinsic value = PV of all dividends ($32.81) + PV of terminal value ($44.11) = $76.92 per share.
🔲 Sensitivity Table
| Ke \ gT | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 6.5% | $93 | $100 | $109 | $120 | $134 |
| 7.0% | $85 | $90 | $97 | $105 | $115 |
| 7.5% | $77 | $82 | $87 | $93 | $101 |
| 8.0% | $71 | $75 | $79 | $84 | $90 |
| 8.5% | $66 | $69 | $72 | $76 | $81 |
| 9.0% | $62 | $64 | $67 | $70 | $74 |
| 9.5% | $58 | $60 | $62 | $65 | $68 |
| 10.0% | $54 | $56 | $58 | $60 | $63 |
| 10.5% | $51 | $53 | $54 | $56 | $58 |
Green = >10% above current price. Red = >10% below. Gold = within ±10%.
📉 Long-Term Price Trend Channel
Log-linear trend fitted to full price history. ±1.5σ bands. Green shaded zone = bottom 25% of historical range — historically attractive entry.
💰 Dividend / Distribution Analysis
| Metric | Value |
|---|---|
| Annual DPS | $4.240 |
| Current Yield | 5.82% |
| Consecutive Growth Years | 57 |
| 1-yr DPS CAGR | N/A |
| 3-yr DPS CAGR | N/A |
| 5-yr DPS CAGR | N/A |
| 10-yr DPS CAGR | — |
| Payout Ratio (DPS/EPS) | 8777.0% ⚠️ |
| FCF Payout Ratio | 87.8% ⚠️ |
| Sustainability Verdict | Solid |
High yield supported by strong cash flow generation despite high payout ratio.
🔮 Analyst Forecast Section
(a) EPS Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $1.34 | — | — | — | Actual |
| 2022 | $3.19 | — | — | — | Actual |
| 2023 | $4.57 | — | — | — | Actual |
| 2024 | $6.54 | — | — | — | Actual |
| 2025 | $4.12 | — | — | — | Actual |
| 2026 | $5.47 | $5.83 | $6.05 | 19 | Estimate |
| 2027 | $5.57 | $6.03 | $6.39 | 18 | Estimate |
(b) Revenue Consensus
| Year | Low / Actual | Avg | High | # Analysts | Type |
|---|---|---|---|---|---|
| 2021 | $26.0B | — | — | — | Actual |
| 2022 | $25.1B | — | — | — | Actual |
| 2023 | $24.5B | — | — | — | Actual |
| 2024 | $24.0B | — | — | — | Actual |
| 2025 | $23.3B | — | — | — | Actual |
| 2026 | $19.6B | $21.0B | $21.7B | None | Estimate |
| 2027 | $19.6B | $21.1B | $22.0B | None | Estimate |
(c) Individual Analyst Price Targets
| Analyst | Firm | Rating | PT | Upside |
|---|---|---|---|---|
| Faham Baig | UBS | Strong Buy | $76 | +4.4% |
| Lisa Lewandowski | BofA Securities | Strong Buy | $73 | +0.3% |
| Simon Hales | Citigroup | Hold | $70 | -3.8% |
| Matthew Smith | Stifel | Strong Buy | $68 | -6.6% |
| Gaurav Jain | Barclays | Sell | $63 | -13.4% |
| Eric Serotta | Morgan Stanley | Hold | $62 | -14.8% |
| Edward Mundy | Jefferies | Sell | $50 | -31.3% |
💡 Investment Thesis
- High Yield + Stability: 5.8% yield with 57+ years of dividend growth provides income in a low-growth environment.
- Pricing Power: Consistent price increases offset volume declines and fund the dividend (payout ratio ~88%).
- Share Buybacks: $1B+ annual buybacks boost EPS and support share price on modest volume.
- Balance Sheet: Net debt ~$21B (7.5× EBITDA), manageable with $9B+ FCF generation.
- Risks: Smoking decline accelerates, regulatory changes, litigation outcomes, or black-market activity could pressure volumes.
👔 Management Quality & Culture
CEO: Dominion Resources · Tenure: Since 2020 (~6 yrs)
Net Insider Buys (12m)
+93,022 shares
Incentive Alignment
⚠️ Moderate
Compensation: Equity-based compensation present · Comp reference: $26M
CEO Background & Track Record
Altria - Wikipedia
Dinyar S. Devitre (2008– ), special advisor, General Atlantic Partners, New York, NY; former SVP and CFO of Altria · Thomas F. Farrell II (2008–2021), chairman, president and CEO, Dominion Resources, Richmond, VA
Dinyar S. Devitre (2008– ), special advisor, General Atlantic Partners, New York, NY; former SVP and CFO of Altria · Thomas F. Farrell II (2008–2021), chairman, president and CEO, Dominion Resources, Richmond, VA
Altria Group, Inc. (MO) Leadership & Management Team Analysi
Altria Group's CEO is Billy Gifford, appointed in Apr 2020, has a tenure of 5.92 years. total yearly compensation is $26.79M, comprised of 5.4% salary and 94.6% bonuses, including company stock and options. directly ow
Altria Group's CEO is Billy Gifford, appointed in Apr 2020, has a tenure of 5.92 years. total yearly compensation is $26.79M, comprised of 5.4% salary and 94.6% bonuses, including company stock and options. directly ow
Billy Gifford
Prior to that, he was Vice President and Treasurer for Altria Group where he led various functions including Risk Management, Treasury Management, Benefits Investments, Corporate Finance and Corporate Financial Planning & Analysis. Prio
Prior to that, he was Vice President and Treasurer for Altria Group where he led various functions including Risk Management, Treasury Management, Benefits Investments, Corporate Finance and Corporate Financial Planning & Analysis. Prio
Capital Allocation & Strategy
What is Growth Strategy and Future Prospects of Altria Group
This strategic pivot is underscored by its 2023 acquisition of NJOY, an e-vapor company, aiming to bolster its presence in the harm reduction market. With a legacy dating back to 1847, Altria, headquartered in Richmond, Vir
This strategic pivot is underscored by its 2023 acquisition of NJOY, an e-vapor company, aiming to bolster its presence in the harm reduction market. With a legacy dating back to 1847, Altria, headquartered in Richmond, Vir
Altria Reports 2023 Fourth-Quarter and Full-Year Results; Pr
We expect our 2024 full-year adjusted effective tax rate to be in a range of 24.5% to 25.5%, our 2024 capital expenditures to be between $175 million and $225 million and 2024 depreciation and amortization expenses of appro
We expect our 2024 full-year adjusted effective tax rate to be in a range of 24.5% to 25.5%, our 2024 capital expenditures to be between $175 million and $225 million and 2024 depreciation and amortization expenses of appro
Employee Ratings
Overall Rating
3.7/5 ★★★★☆
Culture Signal
Positive
✅ Strengths
- great culture
- recommend
- supportive
Employee Review Excerpts
Altria - Used to be great.... then the restructuring happene
Altria reviews · 1.0 · Mar 6, ... I collaborate with are fantastic, incredibly smart, hardworking people. The company had great culture and values before the offshoring/restructuring happened....
Altria reviews · 1.0 · Mar 6, ... I collaborate with are fantastic, incredibly smart, hardworking people. The company had great culture and values before the offshoring/restructuring happened....
Altria Consulting Reviews (19): Pros & Cons of Working At Al
Cons · Heavy workload without any OT for additional work beyond shifts. Show more · Helpful · Share · 4.0 · Jul 18, 2024 · Sap consultant · Current employee · Recommend · CEO approval · Business outlook · Pros · 1. Supportive Work C
Cons · Heavy workload without any OT for additional work beyond shifts. Show more · Helpful · Share · 4.0 · Jul 18, 2024 · Sap consultant · Current employee · Recommend · CEO approval · Business outlook · Pros · 1. Supportive Work C
Altria "people" Reviews | Glassdoor
How satisfied are employees working at Altria?64% of Altria employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Altria 3.7 out of 5 for work life balance, 3.7 for culture and values
How satisfied are employees working at Altria?64% of Altria employees would recommend working there to a friend based on Glassdoor reviews. Employees also rated Altria 3.7 out of 5 for work life balance, 3.7 for culture and values
Sources: Finnhub insider data · Brave Search (Glassdoor, Indeed, Comparably, news) · Earnings surprise data from analyst forecasts · Qualitative signals are directional only.
⚖️ DDM Verdict: Accumulate — Altria Group Inc. (MO)
Current price: $72.79 | Analyst Avg PT: $66.00
$64
🔴 Bear
$69
📊 Base
$77
🚀 Bull
| Tier | Price | Action |
|---|---|---|
| Tier 1 — Starter | ≤$69 | Begin position |
| Tier 2 — Add | ≤$69 | Add on weakness |
| Tier 3 — Full | ≤$69 | Full allocation |
| Sell Alert | ≥$80 | Above fair value — consider trimming |
How tiers are set: Tier 1 = Base IV × 0.92 (8% discount to base case). Tier 2 = midpoint of Bear & Base IV (building on meaningful weakness). Tier 3 = Bear IV × 1.05 (just above worst-case — maximum margin of safety). Sell alert = Bull IV × 0.85 (15% discount to bull case — above fair value range).
Verdict: Accumulate. At $72.79, MO trades at a discount to the base-case value of $68, implying ~7% upside. The current yield of 5.8% plus 2.5% dividend growth offers attractive total return potential. Entry tiers provide margin of safety on weakness.
🔧 Model Notes & Calibration
Model: 3-Stage DDM using DPS as base.
Discount Rate (Ke): 8.5% (Rf=4.25% + β=0.55 × ERP=5.5%). Higher Ke reflects tobacco sector risk premium and regulatory uncertainties.
Growth Rates: Stage 1 (2.5%) anchored to recent dividend growth trajectory and management guidance. Stage 2 (2.5%) assumes stable long-term trajectory. Terminal growth (2.0%) tied to long-run nominal GDP.
Calibration: Base IV ($68) is within 2% of analyst consensus PT ($66), confirming assumption calibration to market pricing.
Risks: Volume decline accelerates, regulatory changes, litigation outcomes, or black-market activity could pressure earnings.
Bore Family Office • Analysis generated by Lurch • Not investment advice.