Core Insights - Altria Group, Inc. achieved 7.2% adjusted earnings per share (EPS) growth in the first half of 2025, reaching $2.67 compared to $2.49 in the same period last year, driven by higher adjusted operating companies income, fewer shares outstanding, and a lower adjusted tax rate [1][8] - The company's net revenues decreased by 3.6% year over year to $11.4 billion, primarily due to challenges in the smokeable products segment, but adjusted operating companies income for smokeable products increased by 3.5% [2][8] - Altria repurchased 10.4 million shares in the first half, contributing to EPS growth, and returned over $4 billion to shareholders through buybacks and dividends [3][8] Financial Performance - Adjusted EPS for the second quarter was $1.44, an increase of 8.3% from $1.33 in the second quarter of 2024 [1][8] - Smokeable products' adjusted operating companies income margins improved by 3.5 percentage points to 64.5%, supported by elevated pricing and cost efficiencies [2][8] - The company maintains a forward price-to-earnings ratio of 11.6X, lower than the industry's average of 14.95X [9] Comparative Analysis - Philip Morris International Inc. reported a 20.1% year-over-year increase in adjusted EPS to $1.91, benefiting from strong pricing in heated tobacco and higher volumes in smoke-free products [5] - Turning Point Brands, Inc. saw adjusted EPS rise to 98 cents, up from 89 cents last year, driven by a significant increase in Modern Oral sales [6] Future Outlook - The Zacks Consensus Estimate for Altria's earnings implies year-over-year growth of 5.3% for 2025 and 2.9% for 2026 [10]

Core Insights - Altria Group, Inc. is focusing on the growing nicotine pouch market, with its on! brand leading the way, achieving a 26.5% year-over-year increase in shipments to 52.1 million cans in Q2 2025, and capturing an 8.7% share of the U.S. oral tobacco market [1][8] - The U.S. nicotine pouch category has grown by 52%, indicating a significant shift in consumer preferences towards this product type [1] - Altria's marketing efforts have successfully reached over 170,000 adult tobacco consumers, increasing brand awareness by 7 percentage points [2][8] Shipment and Earnings Performance - The oral tobacco segment reported a 10.9% increase in adjusted operating companies income (OCI) year-over-year, with margins expanding from 65.6% to 68.7% [3][8] - The on! brand captured a 16.7% market share in Q2 and 17.3% in the first half of 2025, demonstrating strong growth momentum [1] Competitive Landscape - Competition in the nicotine pouch category is intensifying, with Philip Morris International's ZYN brand experiencing a 26% growth in U.S. offtake and a 43% increase globally [5] - Turning Point Brands, Inc. has seen its Modern Oral sales increase nearly eightfold year-over-year to $30.1 million in Q2 2025, positioning itself as a fast-growing competitor in the market [6] Valuation and Estimates - Altria's shares have increased by 8.5% over the past month, outperforming the industry growth of 3.9% [7] - The company trades at a forward price-to-earnings ratio of 12.2X, lower than the industry's average of 15.35X [10] - The Zacks Consensus Estimate for Altria's earnings per share for 2025 and 2026 has increased by one cent each to $5.39 and $5.55, respectively [11]

Core Insights - Philip Morris International (PM) is leveraging its ILUMA platform to sustain momentum in its heated tobacco unit (HTU) through the latter half of 2025, with adjusted in-market sales growth for HTUs reaching 11.4% in Q2 2025 [1][7] - The company has expanded ILUMA into over 30 markets, significantly enhancing market share and user adoption, particularly in Europe and Japan [2][3] Sales and Market Performance - In Q2 2025, HTU sales increased by 11.4%, with Europe growing by 9.1% and Japan by 7.8%, attributed to the rollout of ILUMA i and new consumable products [1][7] - ILUMA's expansion has led to an increase in IQOS HTU market share by 1.2 percentage points to 10.9% in Europe, with over 20% share in key cities across 12 markets [2][7] Future Growth Projections - PMI anticipates smoke-free product volume growth of 12-14% in 2025, with the ILUMA upgrade cycle expected to support continued double-digit HTU growth [3] - The second half of 2025 will focus on maintaining rollout momentum while navigating competitive and regulatory challenges [3] Competitive Landscape - Turning Point Brands reported a significant increase in Modern Oral sales, reaching $30.1 million, and raised its revenue target for 2025 to $100-$110 million, emphasizing flavor innovation and retail presence [4] Valuation and Earnings Estimates - Philip Morris shares have decreased by 5.7% over the past month, contrasting with the industry's growth of 1.3% [5] - The forward price-to-earnings ratio for PM is 21.17X, higher than the industry average of 15.36X [8] - The Zacks Consensus Estimate for PM's earnings per share for 2025 and 2026 has increased by 4 cents and 7 cents, respectively, to $7.49 and $8.39 [9]

Core Insights - Philip Morris International (PM) is leveraging its ILUMA platform to sustain momentum in its heated tobacco unit (HTU) through the latter half of 2025, with adjusted in-market sales growth for HTUs reaching 11.4% in Q2 2025 [1][7] - The company has expanded ILUMA into over 30 markets, enhancing market share and user adoption, particularly in Europe and Japan [2][3] Group 1: Market Performance - In Q2 2025, HTU sales increased by 11.4%, with Europe growing by 9.1% and Japan by 7.8%, attributed to the rollout of ILUMA i and new consumable products [1][7] - ILUMA's expansion contributed to IQOS HTU share rising by 1.2 percentage points to 10.9% in Europe, with over 20% share in key cities across 12 markets [2][7] Group 2: Future Projections - PMI anticipates smoke-free product volume growth of 12-14% in 2025, with the ILUMA upgrade cycle expected to support double-digit HTU gains [3] - The second half of 2025 will focus on maintaining rollout momentum while navigating competitive and regulatory challenges [3] Group 3: Competitive Landscape - Altria Group is preparing for the U.S. commercialization of the IQOS ILUMA platform, targeting select state markets and leveraging the Marlboro brand for adult smoker conversion [4] - Turning Point Brands reported a significant increase in Modern Oral sales, reaching $30.1 million, and raised its revenue target for 2025 to $100-$110 million, emphasizing flavor innovation and retail presence [5] Group 4: Valuation and Earnings Estimates - Philip Morris shares have decreased by 5.7% in the past month, contrasting with the industry's growth of 1.3% [6] - The forward price-to-earnings ratio for PM is 21.17X, higher than the industry's average of 15.36X [9] - The Zacks Consensus Estimate for PM's earnings per share for 2025 and 2026 has increased by 4 cents and 7 cents, respectively, to $7.49 and $8.39 [10]

Core Insights - Altria Group's on! brand experienced significant growth in Q2 2025, with shipments increasing by 26.5% year over year and capturing an 8.7% market share in the oral tobacco segment, up 0.7 percentage points from the previous year [1][8] - The oral tobacco segment's adjusted operating income rose by 10.9%, despite challenges in the moist smokeless tobacco (MST) category, which saw declines in retail share for key brands [1][2] Oral Tobacco Segment Performance - The moist smokeless tobacco category faced headwinds, with Copenhagen and Skoal experiencing retail share declines of 3.5 and 1.6 percentage points, respectively, leading to an overall decline of 4.6 percentage points in the segment's total retail share to 33.1% [2] - Volumes for Copenhagen and Skoal fell by 7.7% and 8.8%, respectively, indicating a significant downturn in traditional smokeless products [2] Nicotine Pouch Market Dynamics - The nicotine pouch category now constitutes over half of the U.S. oral tobacco market, providing a favorable environment for on!'s growth, although competition is intensifying [3] - on!'s share of the pouch segment decreased by 2.3 percentage points to 16.7%, highlighting the challenges in maintaining market share [3][4] Competitive Landscape - Philip Morris International's ZYN brand saw U.S. offtake growth of 26% in Q2 2025, with global volumes increasing by 43% due to expansion into 44 markets, supporting a multi-category smoke-free strategy [5] - Turning Point Brands reported a nearly eightfold increase in Modern Oral sales to $30.1 million, aiming for a double-digit U.S. market share by the end of the decade [6] Financial Performance and Valuation - Altria's shares increased by 10.5% over the past month, outperforming the industry growth of 1.3% [7] - The company trades at a forward price-to-earnings ratio of 11.7X, lower than the industry's average of 15.36X [10] - The Zacks Consensus Estimate for Altria's earnings per share for 2025 and 2026 has risen by 3 cents and 2 cents, respectively, to $5.39 and $5.55 [11]