Altria (MO) Stock Forecast & Price Target

Altria Group maintains a leading position in the U.S. tobacco market, highlighted by its Marlboro brand capturing a 42% share in 2024 while also experiencing impressive growth in its oral tobacco segment, particularly with the On! brand, which achieved an 8.8% retail share reflecting a 180 basis point year-over-year increase. The company's strategic investments in its oral products, coupled with an expectation of topline outperformance and improved operating margins, indicate a promising outlook for profit diversification and growth over the next two years. Additionally, the recent acquisition of vaping company Njoy Holdings and ongoing initiatives in the heated tobacco category further enhance Altria's growth potential beyond traditional segments.

Altria Group faces a negative outlook due to a diminishing demand for its core cigarette products, evidenced by a decline in past month usage among adult consumers to less than 15%. Additionally, the performance of its oral tobacco segment is adversely affected by struggling legacy brands, which overshadows any growth from newer products like On!, whose own growth rates are also decelerating. Furthermore, pressures on segment margins and challenges in maintaining profitability are exacerbated by a weaker macroeconomic environment that has led to a breakdown in demand elasticity.