Altria Group, Inc. recently disclosed its financial outcomes for the third quarter of 2025, revealing a 5% increase in adjusted earnings per share and robust free cash flow. Despite these positive indicators, the market reacted with skepticism, causing the company\u2019s stock to decline by over 7%.
The company's traditional cigarette business continues to be a strong performer, demonstrating significant profitability and expanding profit margins. It maintains a dominant position in the premium market segment. However, this sector faces increasing competition and a trend towards less expensive alternatives, which has put pressure on its retail market share. Compounding these challenges, the oral nicotine product line, especially the \u201con!\u201d pouches, delivered disappointing results in the third quarter.
Despite the recent stock drop and mixed segmental performance, Altria presents a compelling investment case. With a free cash flow yield exceeding 9% and a price-to-earnings ratio below 11, the company exhibits strong financial health. Its commitment to disciplined capital allocation further reinforces confidence in its long-term value proposition. These factors suggest that, for investors focused on sustained returns, Altria remains an attractive holding, underscoring its potential for resilience and growth.