UPDATE: Stifel Nicolaus Downgrades Altria to Hold

Stifel Nicolaus lowers its rating on Altria Group (NYSE: MO) from Buy to Hold as the company surpassed its target price of $29 and recent strength has pushed its valuation to a level with limited upside.

Stifel says, “We remain confident in the fundamentals, including into 2012 when we expect limited state excise tax increases, strong price realization (as evidenced in the recent price increase effective 12/12/2011), an “average” industry volume decline (-3.5% or so), and strong free cash flow generation. However, we also believe the share price essentially accounts for the solid growth we estimate in 2012.”

MO closed at $28.99 per share on Tuesday.