BofA Securities lifted its price target on Altria Group Inc. (NYSE:MO) to $72 from $64 while reiterating a Buy rating, citing favorable regulatory and political developments along with resilient earnings performance.
The brokerage highlighted that tobacco and nicotine stocks have outperformed this year, with the S&P 500 Tobacco Index up 40% year-to-date and Altria rising 29.4%. Key drivers included the delay of the menthol ban in March 2024, Republican wins in national elections, cost optimization measures, and reduced tariff exposure.
BofA also pointed to progress in curbing illicit trade at ports of entry, though scanner data has yet to fully confirm it. The firm noted a sharp drop in disposable vape sales in early August, though volumes may have shifted to harder-to-track outlets such as vape shops.
Despite persistent challenges from illicit trade, the analysts emphasized the stability of tobacco earnings compared with other consumer staples this year.
