Altria Group Surges 2.35% Amid Buyback Boost and Analyst Volatility – What’s Next?

Summary
• Altria Group (MO) surges 2.35% to $57.215, outpacing its 52-week low of $50.08 and 52-week high of $68.60.
• $2.0 billion share buyback and 7.6% dividend yield drive investor optimism.
• Analyst ratings split: Goldman Sachs upgrades to 'Buy' at $72 target, while UBS cuts to 'Neutral'.

Altria Group’s intraday rally reflects a mix of corporate action and analyst sentiment. The stock’s 2.35% gain, fueled by a $2.0 billion buyback and a 7.6% yield, contrasts with mixed analyst ratings. With Philip Morris (PM) also rising 1.88%, the tobacco sector shows resilience despite regulatory headwinds.

Share Buyback and Dividend Drive Altria’s Rally
Altria’s board authorized a $2.0 billion share repurchase program (1.9% of shares) and declared a $1.06 quarterly dividend (7.6% yield), signaling confidence in undervaluation. These moves, coupled with a $1.45 EPS beat (up $0.01) and $4.24 annualized dividend, attracted institutional buyers like Capital Investment Advisors LLC, which increased its stake by 3.9%. The buyback and dividend, combined with a 5.37–5.45 FY2025 EPS guidance, underpinned the 2.35% intraday surge.

Tobacco Sector Gains Momentum as Philip Morris Climbs 1.88%
Altria’s 2.35% gain outperformed Philip Morris (PM), the sector leader, which rose 1.88%. While both stocks benefit from buybacks and dividends, Altria’s higher yield (7.6% vs. PM’s 4.5%) and aggressive repurchase program (1.9% of shares) highlight its focus on shareholder returns. The sector faces regulatory scrutiny, but Altria’s stable cash flow and 37.89% net margin position it as a defensive play.

Options Playbook: MO20260116P57.5 and MO20260116P57 Lead the Charge
• RSI: 28.97 (oversold)
• MACD: -0.86 (bearish), Signal Line: -0.57, Histogram: -0.29
• Bollinger Bands: Upper $60.52, Middle $57.83, Lower $55.14
• 200D MA: $60.65 (above current price)

Altria’s RSI at 28.97 suggests oversold conditions, while the MACD histogram (-0.29) indicates bearish momentum. The stock is trading near its 50-day MA ($57.98) but below the 200D MA ($60.65), signaling a potential short-term rebound. Key levels to watch: $55.14 (lower Bollinger Band) and $57.83 (middle Bollinger Band).

Top Options Contracts:
• MO20260116P57.5 (Put):
- Strike: $57.50, Expiry: 2026-01-16
- IV: 13.06% (moderate), LVR: 89.35%, Delta: -0.62, Theta: -0.156, Gamma: 0.343, Turnover: 19,429
- IV: Implied volatility suggests moderate risk/reward.
- LVR: High leverage amplifies gains if the stock dips below $57.50.
- Delta: -0.62 indicates sensitivity to price drops.
- Theta: -0.156 shows time decay is manageable.
- Gamma: 0.343 means delta will adjust rapidly with price swings.
- Turnover: High liquidity ensures easy entry/exit.
- Payoff: If MO drops 5% to $54.35, payoff = max(0, $57.50 - $54.35) = $3.15 per share.
- Why it stands out: High gamma and moderate IV make this put ideal for a short-term dip.

• MO20260116P57 (Put):
- Strike: $57.00, Expiry: 2026-01-16
- IV: 13.95% (moderate), LVR: 142.96%, Delta: -0.445, Theta: -0.1228, Gamma: 0.334, Turnover: 13,684
- IV: Slightly higher than the sector average.
- LVR: Extreme leverage for aggressive downside bets.
- Delta: -0.445 balances sensitivity and risk.
- Theta: -0.1228 indicates time decay is manageable.
- Gamma: 0.334 ensures delta adjusts with price moves.
- Turnover: High liquidity supports execution.
- Payoff: If MO drops 5% to $54.35, payoff = max(0, $57.00 - $54.35) = $2.65 per share.
- Why it stands out: High leverage ratio (142.96%) offers outsized returns if the stock breaks below $57.00.

Action: Aggressive bulls may consider MO20260116P57.5 into a bounce above $57.83. If $55.14 holds, MO20260116P57 offers short-side potential.

Backtest Altria Group Stock Performance
The backtest of MO's performance after a 2% intraday increase from 2022 to the present shows favorable results. The 3-Day win rate is 56.77%, the 10-Day win rate is 57.33%, and the 30-Day win rate is 57.33%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest was 1.24%, which occurred on day 59, suggesting that MO can yield decent gains even after the initial 2% surge.

Bullish Setup Confirmed – Target $58.50 Resistance as Analysts Weigh In
Altria’s 2.35% rally, driven by a $2.0 billion buyback and 7.6% yield, suggests a near-term bullish setup. The stock’s RSI at 28.97 and proximity to the 50-day MA ($57.98) indicate potential for a rebound. However, the 200D MA ($60.65) and $58.50 (30D support/resistance range) remain critical resistance levels. With Philip Morris (PM) up 1.88%, the sector’s defensive appeal persists. Watch for a break above $58.50 to validate the bullish case, or a drop below $55.14 to trigger a deeper correction.