Altria (MO) PT Raised to $71 at Morgan Stanley

Morgan Stanley analyst Eric Serotta raised the price target on Altria (NYSE: MO) to $71.00 (from $62.00) while maintaining a Equalweight rating.

The analyst comments "Equal-weight: MO closed up +6.5% (vs the S&P 500 +1.0%) following a solid 1Q EPS beat and reiterated FY26 guidance. MO reported 1Q adjusted EPS of $1.32 vs the $1.25 VA/SA consensus, with a 4% topline beat and +90 bps GM upside driving a 5% OCI beat. Results benefited form $51M pretax or $0.02/share after-tax from the double-duty drawback, broadly in line with market expectations based upon our conversations, and up from $27M in 4Q. MO Smokable segment volumes declined - 2.3% vs the -5.9% consensus, with MO total cigarette share up y/y for the first time since 2021. MO reiterated FY26 guidance of 2.5-5.5% EPS growth, with 1Q upside in our view providing flexibility to manage through heightened macro uncertainty from higher gas prices and potentially drive EPS upside. We are EW, with improved profit momentum and visibility from the double duty drawback, but continued structural headwinds. We see limited scope for upward re-rating following the ~70% stock appreciation over the L2Y, but solid financial flexibility from MO's ~$11B stake in ABI (covered by Sarah Simon) and $5.6 billion of capital losses, along with a ~6% dividend yield. Additionally, MO's limited reduced-risk portfolio is unlikely to move the needle for the company over the mid-term. Post 1Q, we are raising our FY26-27 EPS estimates by ~2.5%, and our PT to $71 from $62."

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