MO
Altria Group, Inc.
$73.62
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 5.4% above fair value
You pay
$73.62
Bear
$57.54
Fair
$69.87
Bull
$82.20
Bear
$57.54
-21.8%
$4.11 × 14x P/E
Fair
$69.87
-5.1%
$4.11 × 17x P/E
Bull
$82.20
+11.7%
$4.11 × 20x P/E
Adjust Assumptions
17.0x
4.11$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
17.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (26 analysts)
$69.71
Divergence from AlphaVal
0%
Summary
Applying a 17x P/E to adjusted EPS of $4.11, the base-case value is $69.87 per share. DDM cross-check: $95.15.
Warnings
The company pays out 104% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $95.15 (above our primary estimate by 36%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples