Jefferies initiates Altria stock with Underperform rating, cites combustibles risk
Investing.com
Published Jul 09, 2025 01:30AM ET
Investing.com - Jefferies initiated coverage on Altria Group (NYSE:MO) with an Underperform rating and a $50.00 price target on Wednesday. The stock currently trades at $59.54, near its 52-week high of $61.26, with InvestingPro data showing impressive gross profit margins of 71%.
The research firm expressed concern about risks to Altria's U.S. combustibles business, pointing to accelerated high-single-digit volume declines and additional pressure from consumer downtrading.
Jefferies noted that Altria's market-leading position in declining traditional oral tobacco products is offsetting growth in modern oral products.
The firm projects slower cash returns growth for Altria compared to peers British American Tobacco (NYSE:BTI) and Imperial Brands (OTC:IMBBY), which Jefferies believes have "a firmer footing."
Jefferies highlighted the valuation disparity, noting Altria trades at a calendar 2026 price-to-earnings ratio of 11.5x, compared to British American Tobacco at 9.5x and Imperial Brands at 8.5x.
In other recent news, Altria Group has seen a series of significant developments. UBS upgraded Altria's stock rating from Sell to Neutral, citing improved prospects due to increased enforcement against illicit vape products. This change is supported by a 40% decline in vape exports from China to the U.S., which has benefited Altria by potentially stabilizing cigarette volume decline. In corporate moves, Altria announced a temporary suspension of trading under its employee benefit plans due to a transition in trustee services, affecting various employee accounts. Additionally, Altria appointed Katie F. Patterson as the new Vice President and Controller, effective August 1, 2025, following the retirement of Steven D'Ambrosia. During its Annual Meeting of Shareholders, Altria approved key financial plans and executive compensation, including the 2025 Performance Incentive Plan and the 2025 Stock Compensation Plan for Non-Employee Directors. The company also declared a quarterly dividend of $1.02 per share, scheduled for payment on July 10, 2025. Furthermore, a joint operation by the FDA and U.S. Customs led to the seizure of nearly two million units of illegal e-cigarettes, valued at $34 million, which aligns with Altria's interests in combating unauthorized vape products.
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