A worked DCF of Altria
Built from the company's annual filing for the fiscal year ended 31 December 2025, with market inputs as of 15 September 2026. Every figure below carries a tag saying where it came from, and every result is computed by the same engine as the VALUATIO terminal. A worked example of the method, not a view on the stock.
Open this model in the terminalFree account. Change any input and every figure moves with it.
What went in
Every input the model uses is here. The tag beside each one says where it came from, so you can tell a number Altria filed from one this page assumed.
Filed by Altria Group, Inc., CIK 0000764180, for the year ended 31 December 2025. Check any SEC figure against the filing on SEC EDGAR.
| The business | ||
|---|---|---|
| Revenue, filed year | $23,279m | SEC |
| Revenue growth, years one to five | (3.1%), (1.6%), 0.0%, 1.5%, 3.0% | EST |
| EBITDA margin | 43.7% | SEC |
| Depreciation and amortisation, share of revenue | 1.1% | SEC |
| Capital spending, share of revenue | 0.9% | SEC |
| Working capital, share of the change in revenue | 10.0% | DEF |
| Tax rate | 26.0% | SEC |
| The discount rate | ||
| Risk-free rate | 4.97% | UST |
| Equity risk premium | 5.00% | DEF |
| Beta | 0.18 | CALC |
| Pre-tax cost of debt | 5.71% | IDX |
| Debt share of the capital structure | 25% | DEF |
| Terminal growth | 2.25% | DEF |
| The balance sheet | ||
| Borrowings | $25,709m | SEC |
| Cash | $4,474m | SEC |
| Net debt | $21,235m | SEC |
| Shares outstanding | 1,669.7m | SEC |
- SEC
- Reported in the annual filing
- EST
- Estimated: a projection, not a reported figure
- UST
- 10-year US Treasury yield, published daily by the Treasury
- IDX
- ICE BofA corporate bond index yield, published daily via FRED
- CALC
- Computed from five years of weekly returns against SPY
- DEF
- House default: a documented assumption, not data
Five years of free cash flow
Revenue grows along the path above; margins, capital spending and tax stay at the filed year's proportions. Free cash flow is what is left for every provider of capital, and each year is discounted back at the WACC below, from the middle of the year, because cash arrives through it rather than on the last day.
| $ millions | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | $22,557 | $22,196 | $22,196 | $22,529 | $23,205 |
| EBITDA | $9,858 | $9,700 | $9,700 | $9,845 | $10,141 |
| Less depreciation and amortisation | ($248) | ($244) | ($244) | ($248) | ($255) |
| EBIT | $9,609 | $9,456 | $9,456 | $9,598 | $9,885 |
| Less tax on EBIT | ($2,498) | ($2,458) | ($2,458) | ($2,495) | ($2,570) |
| Plus depreciation and amortisation | $248 | $244 | $244 | $248 | $255 |
| Less capital spending | ($203) | ($200) | ($200) | ($203) | ($209) |
| Less increase in working capital | $72 | $36 | $0 | ($33) | ($68) |
| Free cash flow | $7,228 | $7,078 | $7,042 | $7,114 | $7,294 |
| Discount factor | 0.974 | 0.923 | 0.876 | 0.830 | 0.787 |
| Present value | $7,039 | $6,535 | $6,165 | $5,906 | $5,742 |
The discount rate
The weighted average cost of capital blends what shareholders and lenders expect to earn, weighted by how much of the company each finances.
From cash flow to one value per share
After year five the model assumes free cash flow grows at 2.25% a year for ever: the Gordon growth terminal value, which is year-five free cash flow of $7,294m grown one year, divided by WACC less growth.
The terminal value is 85% of enterprise value, so most of this answer rests on the years after the forecast. That is normal for a DCF, and it is why the next table matters.
How much the answer depends on two inputs
Value per share across a range of discount rates and terminal growth rates. The centre is the model above. Move the discount rate one point either way and the value runs from $85.74 to $172.70 a share: small inputs, large answers.
| WACC by growth | 1.75% | 2.00% | 2.25% | 2.50% | 2.75% |
|---|---|---|---|---|---|
| 4.46% | $141.36 | $155.43 | $172.70 | $194.36 | $222.37 |
| 4.96% | $117.71 | $127.42 | $138.92 | $152.76 | $169.74 |
| 5.46% | $100.43 | $107.50 | $115.67 | $125.22 | $136.53 |
| 5.96% | $87.26 | $92.61 | $98.69 | $105.64 | $113.68 |
| 6.46% | $76.89 | $81.07 | $85.74 | $91.00 | $96.98 |
What this model does not know
- The growth path is an estimate, not anyone's forecast: it starts at last year's revenue growth, (3.1%), and tapers to 3% by year five.
- The equity risk premium, the debt share of the capital structure, working capital and terminal growth are house defaults, the same documented assumptions the terminal starts from. They are tagged DEF above.
- Capital spending stays at 0.9% of revenue for all five years. A company in a heavy investment cycle looks worth less here than it will if that spending falls.
- Net debt is borrowings less cash, as filed. Operating leases are left out.
- No share price appears on this page, on purpose. It teaches how a DCF is built; it does not say whether the stock is cheap or dear.
Now change it
The terminal opens this exact model with Altria's filing already loaded. Change the growth path, the margin or the discount rate, and every figure on this page moves with it. Market inputs there are live, so they may have moved since 15 September 2026.
Open this model in the terminal
Learn the method behind each step: Discounted cash flow, Free cash flow, Weighted average cost of capital and Terminal value.