Altria Group Boosts Buybacks and Guidance as Smokeable Margins Expand
Altria raised its 2026 adjusted earnings outlook and expanded its share repurchase program following third-quarter results driven by strong cigarette pricing and high operating margins.
Altria Group, Inc. has raised its 2026 adjusted diluted earnings per share guidance to a range of $5.66 to $5.74 and added $1 billion to its share repurchase program. The company also demonstrated strong cash generation in its third-quarter results, posting $3.108 billion in operating cash flow, which comfortably covered $1.774 billion paid out in dividends.
For the third quarter of 2026, total revenue reached $5.441 billion or $5.44 billion, exceeding expectations, while net income stood at $2,512 million. The company's smokeable products division continued to deliver high profitability, as its adjusted operating companies income margin reached 64.5%, up from 64.4% a year earlier. Adjusted operating companies income in the segment grew 3.9% year over year to $3.07 billion, aided by a 4.4% price realization and tax and duty refunds on imported cigarettes.
Despite profitability gains, traditional cigarette volumes remain under pressure. Altria's adjusted domestic cigarette shipments fell 4% during the third quarter, compared to an estimated 5% decline across the broader industry. To counter adult smokers migrating toward discount brands, which grew to 34.1% of the category, management introduced Marlboro Cowboy Cut as a premium option intended to retain price-sensitive consumers. Marlboro's retail share slipped 1.0 point to 39.5%, even as it retained a 60% share within the premium category.
In smoke-free alternatives, shipment volume for Altria's on! nicotine pouches grew 13.3%, but its overall share of the pouch category declined to 13.5% as competing brands expanded faster. The company also faces ongoing legal scrutiny and investigations concerning disclosures on on! PLUS and smoke-free guidance, while its NJOY ACE device still lacks a return-to-market date.
Altria increased its quarterly dividend to $1.11 per share, reflecting an annualized payment of $4.44. MarketBeat noted an average analyst rating of Hold with a $71.67 average price target, while Zacks Investment Research assigned the shares a Zacks Rank #2 (Buy), citing forward price-to-earnings valuation of 12.99X.