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

Core Insights - Altria Group, Inc. demonstrated resilience in Q3 2025, maintaining profitability despite volume declines in traditional cigarettes through strategic pricing, cost discipline, and investment in smoke-free alternatives [1][6][19] Financial Performance - Adjusted earnings increased by 3.6% year-over-year to $1.45, while net revenues decreased by 3% to $6.07 billion, primarily due to lower revenues in smokeable and oral tobacco segments [6][8] - Adjusted operating companies income (OCI) in the Smokeable Products segment rose by 0.7%, with margins expanding to 64.4% [7][11] Shareholder Returns - Altria increased its quarterly dividend by 3.9% to $1.06 per share, marking the 60th dividend increase in 56 years, and expanded its share repurchase program to $2 billion through 2026 [9][10] Smoke-Free Initiatives - The Oral Tobacco Products segment's adjusted OCI margin improved to 69.2%, despite a 4.6% revenue decline, with the on! nicotine pouch brand achieving a 0.7% increase in shipment volumes [11][12] - The launch of on! PLUS and a partnership with KT&G Corporation aim to enhance Altria's smoke-free product portfolio and explore global opportunities [12][13] Market Position and Valuation - Altria's stock is trading at a forward P/E ratio of 10.53X, significantly lower than the industry average of 14.17X and the S&P 500's average of 23.66X, indicating a potential value opportunity for investors [15][16] Outlook - The near-term outlook for Altria remains cautious but stable, with adjusted earnings guidance narrowed to $5.37-$5.45, reflecting expected growth of 3.5-5% from 2024 [14]