Shares of Altria (MO), the holding company of cigarette-maker Philip Morris and Kraft Foods, got slammed late last month after an Illinois judge ordered it to pay $10 billion in damages stemming from a class-action suit over deceptive advertising.

But industry watchers say Altria has a wide avenue of appeal, and that the plaintiffs in the case should not have had class status. Meanwhile, Altria is saying it could miss a $2.5 billion payment to the states from a 1998 settlement if it's to post the $12 billion bond to appeal the March 21 verdict.

All those billions are enough to make a small-time investor's head spin. (They're also a red flag for Standard & Poor's, which has Altria's "A"-rated credit on watch.) But the big dollar signs don't seem to bother J. Jeffrey Auxier, manager of Auxier Focus fund, which owns a sizable stake in Altria.

Auxier expects overseas tobacco sales, which could rise 9% this year, to help MO out. "On the international side, you have Altria and British American Tobacco, and that's it," he says.

Analysts at Dow Theory Forecasts also think that Altria can pull out of this intact and continue to list the stock as a "Focus Buy." But until the smoke clears, they say, the share price will stay under pressure. Still, even with all the heat, Altria looks attractive trading at just 6 times the 2004 consensus earnings estimate of $5.02 per share. The stock also yields a whopping 8.6% annually; almost 5% more than a ten-year Treasury bond.

-- Elizabeth Frengel

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