Is It Too Late to Consider Altria After Strong Long Term Share Price Gains?

• Wondering if Altria Group at around $58 a share is still a bargain or if the easy money has already been made? This breakdown will walk you through what the numbers are really saying about its value today.
• Despite a modest pullback of about 0.6% over the last week and 0.4% over the last month, the stock is still up 11.2% year to date, 16.4% over the past year and an impressive 102.9% over five years, which naturally raises the question of whether the current price still offers upside.
• Recent moves in the share price sit against a backdrop of ongoing regulatory scrutiny around nicotine products and shifting consumer preferences, along with Altria's continued efforts to reposition its portfolio toward reduced risk and smoke free products. These themes are shaping how investors think about the durability of its cash flows and what a fair valuation should look like.
• On our valuation framework, Altria scores a solid 5 out of 6 for being undervalued across key checks, suggesting the market may not be fully pricing in its cash generation. Next, we will walk through the main valuation approaches behind that score, and later circle back to an even more intuitive way to think about Altria's true worth beyond the usual metrics.

Find out why Altria Group's 16.4% return over the last year is lagging behind its peers.

Approach 1: Altria Group Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth today by projecting the cash it can generate in the future and then discounting those cash flows back to their value in $ now.

For Altria Group, the latest twelve month Free Cash Flow is about $9.19 billion, highlighting the company’s cash generation. Analysts provide explicit forecasts for the next few years. Beyond that point, Simply Wall St extrapolates the trend, resulting in ten year projections that gradually rise as modest growth is assumed. By 2035, Free Cash Flow is projected to reach around $10.81 billion, reflecting steady but not explosive expansion in $ terms.

Using a 2 Stage Free Cash Flow to Equity model, these projected cash flows are discounted back to today, giving an estimated intrinsic value of roughly $104.70 per share. Compared with the current share price around $58, the model suggests the stock is trading at about a 44.2% discount to its calculated fair value. This indicates potential upside if these cash flow assumptions prove accurate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Altria Group is undervalued by 44.2%. Track this in your watchlist or portfolio, or discover 916 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Altria Group.

Approach 2: Altria Group Price vs Earnings

For profitable, established businesses like Altria Group, the Price to Earnings (PE) ratio is a practical way to judge value because it directly links what investors pay today with the profits the company is generating right now. In general, companies with stronger, more reliable growth and lower perceived risk can justify a higher PE, while slower growth or higher risk usually warrants a lower, more cautious multiple.

Altria currently trades at about 11.1x earnings, which is below both the Tobacco industry average of roughly 13.4x and the broader peer group average of around 21.9x. Simply Wall St also calculates a proprietary “Fair Ratio” for Altria of 19.1x, which is the PE level the company might reasonably command given its specific earnings growth profile, industry, profit margins, market cap and risk factors. This Fair Ratio is more tailored than a simple peer or industry comparison because it adjusts for Altria’s own fundamentals rather than assuming all companies deserve the same multiple.

When you set the current PE of 11.1x against the Fair Ratio of 19.1x, the stock screens as materially cheaper than what its characteristics would typically justify.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1455 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Altria Group Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your own story about a company that sits behind the numbers like fair value, future revenue, earnings and margins. A Narrative on Simply Wall St links what you believe about Altria’s business, industry changes and competitive position to a concrete financial forecast and then to a fair value estimate, making the logic from story to numbers completely transparent. Narratives are easy to create and explore within the Community page on Simply Wall St, where millions of investors share how their assumptions translate into buy or sell decisions by comparing their Fair Value to today’s share price. They also update dynamically as new information like news, results or regulatory developments comes in, prompting you to revisit your assumptions instead of relying on static models. For example, one Altria Narrative might lean bullish with a fair value closer to $73 per share on the view that dividend momentum and regulatory clarity will support higher multiples, while a more cautious Narrative might anchor around $49, focusing on margin pressure from illicit e vapor and synthetic nicotine competition.

Do you think there's more to the story for Altria Group? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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