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The firm raised its price target to $62 from $60 on the stock.
Shares of Altria Group are nearing their fair value, and "it is hard to justify much more upside from current levels," RBC Capital said in a note.
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The company sells cigarettes under the Marlboro brand and owns Philip Morris (PM). Marlboro's volumes decreased by 0.7% in the 2015 third quarter, and Philip Morris's volumes were flat for the quarter, the firm notes.
The potential Anheuser-Busch InBev (BUD) and SAB Miller merger could benefit Altria Group's 2019 earnings per share by 8% to 10%, but if the company is forced to use cost method accounting, its earnings per share growth will likely decrease to a range between 4% and 6% from 7% and 9%, according to RBC Capital.
Based in Richmond...