DCF Studio

    MO · NYQ · Consumer Defensive

    Altria Group, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 103.14

    Market price

    USD 77.17

    Implied upside

    +33.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.93% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 103.14+33.7%
    Exit multiple
    USD 83.55+8.3%
    Market price
    USD 77.17

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn5bn10bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 20.7bnUSD 20.9bnUSD 21.2bnUSD 21.4bnUSD 21.8bnUSD 22.1bnUSD 22.6bnUSD 23.0bnUSD 23.6bnUSD 24.2bn+1.7%
    EBITUSD 11.9bnUSD 12.1bnUSD 12.2bnUSD 12.4bnUSD 12.5bnUSD 12.8bnUSD 13.0bnUSD 13.3bnUSD 13.6bnUSD 13.9bn+1.7%
    NOPATUSD 9.4bnUSD 9.5bnUSD 9.6bnUSD 9.8bnUSD 9.9bnUSD 10.1bnUSD 10.3bnUSD 10.5bnUSD 10.7bnUSD 11.0bn+1.7%
    Add depreciation & amortisationUSD 266.1mUSD 268.6mUSD 271.7mUSD 275.4mUSD 279.6mUSD 284.4mUSD 289.9mUSD 296.0mUSD 302.9mUSD 310.4m+1.7%
    Less capital expenditureUSD -207.1mUSD -267.5mUSD -329.6mUSD -393.9mUSD -460.7mUSD -530.4mUSD -603.6mUSD -680.7mUSD -762.2mUSD -848.7m+17.0%
    Capex, % of revenue1.0%1.3%1.6%1.8%2.1%2.4%2.7%3.0%3.2%3.5%-
    Less increase in working capitalUSD -18.1mUSD -6.3mUSD -7.6mUSD -9.0mUSD -10.4mUSD -11.9mUSD -13.5mUSD -15.1mUSD -16.8mUSD -18.6m+0.3%
    Free cashflow to firmUSD 9.5bnUSD 9.5bnUSD 9.6bnUSD 9.6bnUSD 9.7bnUSD 9.8bnUSD 9.9bnUSD 10.1bnUSD 10.3bnUSD 10.4bn+1.1%
    Discount factor0.96660.90310.84380.78830.73650.68820.64290.60070.56120.5244-
    Present valueUSD 9.2bnUSD 8.6bnUSD 8.1bnUSD 7.6bnUSD 7.2bnUSD 6.8bnUSD 6.4bnUSD 6.1bnUSD 5.8bnUSD 5.5bn-
    Present Value Of The ForecastUSD 71.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.640Reported 0.463, pulled toward 1.0 (Blume)
    Cost of equity7.60%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 10.2x interest cover. Book interest / average debt was lower, at 4.6%.
    Market capitalisationUSD 128.4bn83.3% of capital
    Total debtUSD 25.7bn16.7% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.03%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 103.14

    64% of EV

    Forecast FCFF, final year
    USD 10.4bn
    Capex at depreciation, working capital in reinvestment
    USD 11.1bn
    Less reinvestment at g/ROIC (6.1% of NOPAT)
    USD -678.0m
    Capitalised
    USD 10.4bn
    ROIC (reported)
    41.0%
    Terminal value, undiscounted
    USD 236.1bn
    Terminal value, discounted
    USD 123.8bn
    Enterprise value
    USD 194.8bn
    Less net debt
    USD 21.2bn
    Equity value
    USD 173.6bn

    Exit at 12.2x EBITDA

    Value per shareUSD 83.55

    56% of EV

    Terminal value, undiscounted
    USD 173.2bn
    Terminal value, discounted
    USD 90.8bn
    Enterprise value
    USD 161.8bn
    Less net debt
    USD 21.2bn
    Equity value
    USD 140.6bn

    Spread between methods: 21%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.03%148.67166.27190.92227.80288.92
    6.03%113.65122.81134.62150.40172.49
    7.03%91.2996.61103.14111.35121.93
    8.03%75.7879.0883.0287.7893.63
    9.03%64.3966.5469.0572.0075.53

    Outlined: this model. Green text: above today's price of 77.17. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-0.9%1.8%-1.1%
    EBIT margin59.8%57.6%44.6%
    Discount rate-7.0%8.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.