Altria Buyback Doubles to $2 Billion: Smart Timing or Signal of Peak?

Core Insights - Altria Group, Inc. has authorized an expansion of its share repurchase program from $1 billion to $2 billion, extending the program's expiration to December 31, 2026, indicating a strong commitment to returning value to shareholders [2][9] Capital Allocation Strategy - The decision to increase the buyback program follows a period of active repurchases in 2025, where Altria repurchased 1.9 million shares at an average price of $60.13, spending $112 million in Q3 2025, and a total of 12.3 million shares for $712 million in the first nine months of 2025 [3][9] - The structure of the expanded buyback program suggests a steady approach, allowing Altria to maintain discretion over timing while reinforcing buybacks as a key component of its capital return strategy [4] Earnings and Valuation - The expanded buyback may help mitigate modest earnings per share pressure due to declining cigarette volumes, reflecting confidence in Altria's cash generation and disciplined capital allocation [5] - Altria's shares have gained 1.3% in the past month, compared to the industry's growth of 3.1%, and the company trades at a forward price-to-earnings ratio of 10.45X, lower than the industry average of 14.26X [8][11] Earnings Estimates - The Zacks Consensus Estimate for Altria's earnings implies year-over-year growth of 6.3% for 2025 and 2.3% for 2026, with current estimates for the current year at $5.44 and next year at $5.56 [12][13]