MO
Altria Group, Inc.
$74.81
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 3.1% below fair value
You pay
$74.81
Bear
$63.57
Fair
$77.20
Bull
$90.81
Bear
$63.57
-15.0%
$4.64 × 14x P/E
Fair
$77.20
+3.2%
$4.64 × 17x P/E
Bull
$90.81
+21.4%
$4.64 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
16.1x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $72.33 from 26 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $77.20 per share.
Warnings
The company pays out 103% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
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