Altria's Q4 Earnings on the Deck: How to Play the Stock

Core Insights - Altria Group, Inc. is expected to report its fourth-quarter 2025 earnings on January 29, with revenues projected at $5 billion, reflecting a 2% decline year-over-year, while earnings per share (EPS) is estimated at $1.31, indicating a 1.6% growth from the previous year [1][9] Earnings Performance - Altria has a trailing four-quarter average earnings surprise of 3.1%, with the last quarter's earnings surpassing the Zacks Consensus Estimate by 0.7% [2] - The company currently has an Earnings ESP of +1.54% and a Zacks Rank of 3 (Hold), suggesting a favorable outlook for an earnings beat [4][3] Factors Influencing Q4 Earnings - The fourth-quarter performance is likely influenced by disciplined pricing and effective cost control, despite pressure on domestic cigarette shipment volumes due to inflation [5] - Altria has maintained steady profitability through solid revenue management and disciplined cost control, with pricing gains across core smokeable brands cushioning operating income [6] Oral Tobacco Business - A significant contributor to Altria's earnings is its oral tobacco business, particularly nicotine pouches, which have aided segment profitability despite competitive pressures [7] Stock Performance - Over the past three months, Altria's stock has gained 0.6%, underperforming the Zacks Tobacco industry's 12.1% increase and the Consumer Staples sector's 3.7% growth [8] - Compared to peers, Altria's stock performance has lagged, with competitors like Philip Morris and British American Tobacco showing higher gains [8] Valuation - Altria's shares are trading at a forward 12-month price-to-earnings ratio of 11.39, below the industry average of 15.48, indicating compelling value for investors [10] - The valuation gap is notable when compared to key competitors, which have significantly higher P/E ratios [11] Investment Outlook - Altria demonstrates resilience through effective pricing strategies and cost management, offsetting volume pressures in its core cigarette business [12] - The expanding smoke-free portfolio, particularly nicotine pouches, is a key driver for margin support and earnings stability, making Altria an appealing defensive consumer staples stock [12]