Altria's $490M Trading Volume Ranks 244th as Stock Sells at 43% Discount to Fair Value Amid Declining Cigarette Shipments

On August 13, 2025, Altria (MO) closed down 0.77% with a trading volume of $490 million, ranking 244th in market activity. Analysts highlight valuation discrepancies, as the stock trades at a 43.1% discount to its estimated fair value of $115.13. Despite this, its price-to-earnings ratio of 12.6x is below the peer average of 22.9x but exceeds the global tobacco industry average of 11.7x, indicating mixed relative value. Analysts note the stock remains significantly undervalued intrinsically but face challenges from a declining core cigarette business.

Recent earnings showed adjusted EPS growth of 8.3% to $1.44, driven by strong performance in nicotine pouches (26.5% shipment growth) and a 6.9% rise in operating income for oral products. However, cigarette shipment volumes fell 10.2%, with Marlboro down 11.4%. While the dividend appears safe for now, concerns persist about long-term sustainability as pricing power wanes and volume declines accelerate. The company’s debt-to-EBITDA ratio of 2x remains manageable, but cash flow coverage of the dividend has weakened year-to-date.

Backtesting a high-volume trading strategy from 2022 to 2025 revealed a compound annual growth rate of 6.98%, though a 15.46% peak-to-trough drawdown in mid-2023 underscores volatility risks. The strategy demonstrated steady returns overall, reflecting the stock’s role in volume-driven momentum plays despite underlying business challenges.