Altria Narrows 2025 EPS Outlook: Is Margin Growth Peaking?

Core Insights - Altria Group, Inc. has narrowed its 2025 adjusted earnings per share outlook to $5.37-$5.45, reflecting operational discipline and clearer margin performance expectations [1][4][8] Financial Performance - The smokeable segment achieved adjusted operating income margins of 64.4%, an increase of 1.3 percentage points, driven by pricing and lower per-unit settlement charges [2][8] - Domestic cigarette volumes declined approximately 9% in Q3 2025, compared to an estimated 8% decrease at the industry level [2] - Oral tobacco margins rose to 69.2%, up 2.4 percentage points, influenced by mix shifts and promotional activities [3][8] Competitive Landscape - Philip Morris International Inc. reported an adjusted operating income margin of 43.1%, up 1.2 percentage points year over year, with smoke-free gross profit increasing by 19.5% [5] - Turning Point Brands, Inc. saw gross margins in the Stoker's segment rise to 60.2%, an expansion of 440 basis points year over year, driven by strong Modern Oral momentum [6] Valuation Metrics - Altria's shares have decreased by 10% over the past month, while the industry has declined by 1.7% [7] - The forward price-to-earnings ratio for Altria is 10.48X, compared to the industry average of 14.17X [9] - The Zacks Consensus Estimate for Altria's 2025 earnings per share has increased by 1 cent to $5.44, while the estimate for 2026 has decreased by 1 cent to $5.56 [10]