MO Financial Analysis

Analysis Date: 1/31/2025

Business Model

Altria generates revenue primarily through tobacco products including combustible cigarettes, oral tobacco products, and e-vapor products

Revenue Sources

• Smokeable products (cigarettes and cigars) - Primary revenue driver through brands like Marlboro and Black & Mild
• Oral tobacco products - Including MST brands Copenhagen/Skoal and on! nicotine pouches
• E-vapor products - Through NJOY brand

Income Statement Analysis

• Full year net revenues decreased 1.9% to $24.0B primarily due to lower smokeable products revenue
• Q4 adjusted diluted EPS increased 9.3% to $1.29 driven by higher adjusted OCI and fewer shares
• Full year adjusted diluted EPS increased 3.4% to $5.12 driven by fewer shares and lower tax rate

Balance Sheet Analysis

• Strong balance sheet with $3.1B in cash and equivalents
• Maintained target debt-to-EBITDA ratio of approximately 2.1x
• Total debt decreased by 5% to $24.9B

Capital Allocation

Returned over $10.2B to shareholders in 2024 through $6.8B in dividends and $3.4B in share repurchases. Increased dividend by 4.1% in August 2024, marking 59th increase in 55 years. Board authorized new $1B share repurchase program for 2025.

Management Commentary

Strong financial results and significant cash returns to shareholders in 2024

Core tobacco businesses delivered solid income growth and margin expansion

Illicit e-vapor market growth compromising ability to achieve 2028 smoke-free goals

Overall Sentiment: Cautiously optimistic but concerned about illicit e-vapor market impact

Recommendation

Rating: Hold

Reason for Rating: While core business remains strong, illicit market headwinds create uncertainty for smoke-free growth

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/31/2025, 4:57:35 AM