UBS Turns Bullish on Altria (MO) on Improving 2026 Industry Outlook

Altria Group, Inc. (NYSE:MO) is included among the 13 Best Dividend Stocks Paying Over 6%.

On January 9, UBS upgraded Altria Group, Inc. (NYSE:MO) to Buy from Neutral and raised its price target to $63 from $61. UBS said the key reason is that the worst of Altria’s cigarette volume decline may be starting to fade. The firm expects conditions to look better in 2026, supported by healthier industry volumes and more price investment that could help Altria hold its share more steadily. UBS also pointed to improving earnings visibility, which made the risk-reward look more attractive.

Cigarette volumes have been sliding for years, and the recent numbers show how steep that trend has been. In Q3 2025, Altria Group, Inc. (NYSE:MO)’s cigarette volumes fell 8.2% year over year. Over the first nine months of 2025, volumes were down 10.6%. That is a tough backdrop for any consumer product business, especially one built on scale.

Still, Altria has managed to keep its financial performance relatively steady, mainly by leaning on pricing. The company has consistently raised prices to offset weaker volumes, and the category tends to allow that more than most people expect. In practice, many tobacco users do not quit just because prices go up. Some will trade down to cheaper options, but many stick with the same brand and absorb the increase. That pricing power has been one of the reasons Altria has remained resilient despite declining consumption.

At the corporate level, management’s larger objective is to keep the business durable over the long term. Capital allocation plays a big role in that, and the company remains committed to returning a meaningful share of profits to shareholders. The company targets a payout ratio of roughly 80% of adjusted earnings per share, and it has increased its dividend for 56 straight years, one of the longest records in the market.

Altria Group, Inc. (NYSE:MO) is a US-focused tobacco company operating as a holding company, with business lines centered on the manufacture and sale of cigarettes and other products.

READ NEXT: 12 Best Dow Stocks to Buy in 2026 and 13 Best Consumer Staples Dividend Stocks to Invest In Now

Disclosure: None.