We came across a bullish thesis on Turning Point Brands, Inc. on Emil Hartela Investing’s Substack by Emil. In this article, we will summarize the bulls’ thesis on TPB. Turning Point Brands, Inc.'s share was trading at $98.02 as of September 25th. TPB’s trailing and forward P/E were 35.01 and 24.75 respectively according to Yahoo Finance. Tilray Brands (TLRY) – Tilray Boosts Revenue Mix with New Cannabis, Wellness, and Beverage Products Copyright: nilswey / 123RF Stock Photo TPB Holdings (TPB) occupies ...

Core Viewpoint - Altria Group, known for its Marlboro brand, faces an uncertain future despite its history of consistent dividend increases and dominance in the tobacco market [1][2]. Industry Transition - The tobacco industry is shifting from combustible cigarettes to smoke-free products, with Altria's ability to adapt to these trends being crucial for its long-term viability [2][5]. - The U.S. tobacco market remains lucrative, with Altria holding a 41% share of the retail cigarette market and 59.5% of the premium segment [4]. Product Development Challenges - Altria has struggled to establish itself in the next-generation product categories, including electronic vapes and heated tobacco devices, following a failed investment in Juul and a recent patent loss [5][6][7]. - Oral nicotine salt pouches have been Altria's most successful smoke-free product, but it still lags behind competitors like Philip Morris International's Zyn [8]. Financial Performance - In Q2 2025, approximately 83% of Altria's operating income came from smokeable products, indicating that smoke-free products are not yet a significant revenue source [9]. - The legacy smokeable segment remains profitable, allowing Altria to slowly increase free cash flow per share through price hikes and stock repurchases [10]. Dividend and Growth Outlook - Altria recently raised its dividend by 3.9%, offering a starting yield of 6.5%, with analysts projecting an average earnings growth of 3.4% annually over the next three to five years [11][12]. - The company is expected to maintain steady dividend growth for at least another five years, provided it can improve its performance in next-generation products [12]. Distribution Network Advantage - Altria's extensive distribution network, built through its Marlboro brand, positions it to potentially regain market share in new product categories if it executes effectively [13]. Investment Considerations - Altria is considered a strong high-yield dividend stock, appealing to investors seeking steady income, though it may not be suitable for those looking for high growth and capital gains [14][15]. - The company must enhance its product rollout and market presence in the transitioning nicotine industry to secure its long-term position [16].

Core Insights - The global oral tobacco market is projected to reach $11.232 billion in 2024, reflecting a year-on-year growth of 57.57%, and is expected to grow to $25.148 billion by 2028, with a CAGR of 22.32% from 2024 to 2028 [1][2] - The North American and European markets are experiencing high growth rates, while the Asian and African markets are in early stages, indicating significant potential for rapid development in emerging markets [1][2] - The FDA's approval of flavored oral tobacco products is anticipated to act as a catalyst for market growth, potentially increasing the overall market ceiling [1][4] Market Overview - The retail market for oral tobacco is highly concentrated, with Philip Morris International, British American Tobacco, and Altria Group holding market shares of 41.1%, 24.6%, and 13.8% respectively, totaling 79.5% of the market [2] - In 2024, the North American oral tobacco market is expected to reach $8.775 billion, growing by 58.30% year-on-year, while the European market is projected to reach $2.415 billion, with a year-on-year growth of 56.12% [1][2] Company Performance - Philip Morris International's ZYN nicotine pouch sales are projected to be 644 million boxes in 2024, a year-on-year increase of 52.93%, with U.S. sales accounting for 581 million boxes, up 51.49% [2] - British American Tobacco's oral tobacco sales, including brands like Velo and Grizzly, are expected to reach 8.3 billion pouches in 2024, reflecting a year-on-year growth of 55%, with U.S. sales surging by 234% [2] Regulatory Developments - The FDA has authorized the sale of 20 ZYN nicotine pouch products, which are deemed to have lower harmful components compared to traditional cigarettes and most smokeless tobacco products, aligning with public health standards [4] - The approval of flavored products is expected to enhance market growth and expand the market's potential [4] Industry Opportunities - Jin Cheng Pharmaceutical is increasing its production capacity to 200 tons per year, focusing on high-purity nicotine for new tobacco products, which positions the company to benefit from the expanding oral tobacco market [5][6] - The company has received various certifications, including FDA PMTA approval, which enhances its competitive edge in the market [6] Investment Recommendations - Companies to watch in the oral tobacco supply chain include Jin Cheng Pharmaceutical (300233.SZ) and Run Du Co., Ltd. (002923.SZ) [7]

Investment Rating - The investment rating for the industry is "Positive" and is maintained [9] Core Insights - British American Tobacco (BAT) reported a revenue of £12.069 billion for H1 2025, a year-on-year decrease of 2.2% (an increase of 1.8% at constant exchange rates) [2][6] - Revenue from combustible tobacco decreased by 3.5% to £9.515 billion (an increase of 0.8% at constant exchange rates), with total cigarette sales down by 8.7% to 229 billion sticks [2][6] - Revenue from new tobacco products remained flat at £1.651 billion (an increase of 2.4% at constant exchange rates), accounting for 13.7% of total revenue, an increase of 0.3 percentage points year-on-year [2][6] - The company expects a revenue growth of 1%-2% for 2025 (closer to the upper limit) and mid-single-digit growth for new tobacco products, with a projected revenue growth of 3%-5% for 2026 [2][6] Summary by Sections Combustible Tobacco - Revenue decreased by 3.5% to £9.515 billion, driven by price increases, while total cigarette sales fell by 8.7% to 229 billion sticks [2][6] New Tobacco Products - Revenue remained flat at £1.651 billion, with a 2.4% increase at constant exchange rates. The modern oral tobacco segment showed strong growth, while heated tobacco products (HNB) performed steadily, and vaping products faced pressure from illegal markets [2][6] Future Outlook - The company anticipates a revenue increase of 1%-2% for 2025 and mid-single-digit growth for new tobacco products, with expectations of 3%-5% growth in 2026 [2][6] Product Performance - Vaping products saw a revenue decline of 15.3% due to illegal market impacts, while heated tobacco products showed a 0.8% revenue increase. Modern oral tobacco revenue surged by 38.1% [12]

Financial Data and Key Metrics Changes - Group revenue increased by 1.8%, adjusted gross profit rose by 3%, and adjusted profit from operations grew by 1.9%, with adjusted diluted EPS increasing by 1.7% [10][24][47] - The company anticipates full-year revenue at the top end of the 1% to 2% guidance, maintaining APFO guidance of 1.5% to 2.5% [10][26] Business Line Data and Key Metrics Changes - Smokeless products now account for 18.2% of Group revenue, up 70 basis points from last year, with 1.4 million new smokeless consumers added [4] - New categories revenue increased by 2.4%, driven by modern oral growth of over 40% and heated products rising by more than 3%, while vapor declined by 13% [11][12] - Combustibles revenue increased by 0.8%, with volume decline offset by strong pricing, leading to a gross profit increase of 2.4% [13][14] Market Data and Key Metrics Changes - In the U.S., revenue grew by 3.7%, with combustibles driving the growth, while modern oral revenue increased by 3.9% [16][17] - The AME region saw revenue rise by 3.5%, with combustibles up nearly 3% due to strong volumes in Brazil and Turkey [17] - APMEA experienced a total revenue decline of 4.8%, with combustibles down 7.9%, impacted by regulatory headwinds in Bangladesh and Australia [19][20] Company Strategy and Development Direction - The company is focused on a multi-category strategy to leverage consumer trends towards new categories, with significant investments in modern oral and heated products [28][30] - The introduction of the "Fit to Win" program aims to simplify operations and enhance digital decision-making, targeting £500 million in annualized savings by 2028 [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to revenue and profit growth in the U.S., highlighting the importance of regulatory affairs and enforcement for smokeless alternatives [6][41] - The company remains optimistic about the long-term growth potential of modern oral products, especially in emerging markets [30][31] Other Important Information - The company has increased its 2025 share buyback program by £200 million to £1.1 billion, reflecting strong cash generation and commitment to shareholder returns [4][25] - The company has delivered nearly £900 million in productivity savings since 2023 and aims to exceed £1.2 billion by year-end [21] Q&A Session Summary Question: Can you discuss the early performance of GloHilo in Japan and its rollout plans? - Management reported positive feedback from Japanese consumers, with a tailored product offering leading to early market share gains. The rollout will focus on high-profit pools through the end of the year [52][54] Question: What is the current momentum for VeloPlus in the U.S.? - VeloPlus is maintaining strong momentum with high retention rates and increasing market share, despite competitive pressures [57][58] Question: Can you clarify the Fit to Win program's costs and savings? - The program will have some costs in 2025, with a target of £500 million in annualized savings by 2028, which will be reinvested into growth initiatives [61][62] Question: What is the outlook for the vape business in the AME region? - The vape business is facing challenges in Canada due to regulations, but there is potential for growth as the market transitions to closed systems [66][70] Question: How is the company addressing the illegal vapor market in the U.S.? - Management noted a 40% reduction in illegal vapor shipments, with ongoing efforts to enforce regulations and improve market conditions [74][76] Question: What is the impact of the duty drawback on U.S. business? - The duty drawback is positively impacting the top line, but the company is also seeing growth from improved market share and pricing strategies [97][100] Question: Is there capacity to meet the expected growth in VeloPlus? - The company is well-equipped to handle the growth in VeloPlus, with no anticipated capacity shortages [102]

Financial Performance - HY25 total revenue reached £12567 million, a 18% increase compared to HY24 at constant rates[32] - New Category revenue grew by 24% to £1689 million[32] - Adjusted profit from operations increased by 19% to £5435 million, adjusted for Canada[32] - Adjusted diluted earnings per share (EPS) increased by 17% to 1621 pence, adjusted for Canada[32] New Categories - Smokeless products represent 182% of Group revenue, an increase of 70bps[28] - New Category contribution margin increased by 28 percentage points to 106%[28] - Velo Plus experienced strong volume share gains, up 87 percentage points from November 2024 to May 2025[89] Regional Performance - The U S saw a return to revenue and profit growth, driven by combustibles recovery and Velo Plus momentum[30, 46] - In the U S , Velo revenue grew by 384%[46] - Combustibles revenue in the U S increased by 38%[46] - APMEA was impacted by combustibles fiscal and regulatory headwinds, with a revenue decrease of 48%[52] Strategic Initiatives - The company increased its share buy-back program to £11 billion for FY25[28, 30] - The company is targeting >£12 billion in productivity savings from 2023-2025[59] - The company is aiming to generate >£50 billion in free cash flow by the end of 2030[69]

Group 1: Dividend Stocks Overview - The S&P 500 index currently has a low dividend yield of 1.2%, which is less attractive compared to U.S. Treasury bonds [1] - There are high-yield dividend stocks available that can enhance portfolio income [1] Group 2: British American Tobacco (BTI) - British American Tobacco has seen a 40% increase year-to-date and offers a dividend yield of around 6% [2][5] - The company's growth is attributed to new nicotine categories such as vaping and nicotine pouches, with its Velo brand holding a 30% global market share in nicotine pouches [4] - U.S. revenue from nicotine pouches is growing in triple digits, helping to offset declines in traditional cigarette sales [4] Group 3: PepsiCo (PEP) - PepsiCo's stock has experienced a 30% drawdown, resulting in a dividend yield of 4% [7] - Despite concerns over slowing volume growth and competition from weight loss drugs, PepsiCo projects organic revenue growth in 2025 due to its historical pricing power [8] - Over the past decade, PepsiCo's dividend per share has increased by 100%, and the current yield is the highest in 10 years, presenting a buying opportunity [9] Group 4: Altria Group (MO) - Altria Group has the highest dividend yield on the list at 7% [11] - The company primarily relies on cigarette sales for profits, facing challenges in expanding into new nicotine categories [12] - Altria has managed to maintain profitability through price increases and share buybacks, reducing shares outstanding by 15% over the last decade, which supports dividend growth [13][14]

Core Insights - Altria Group, Inc. is committed to transitioning towards a smoke-free future, with a focus on its oral tobacco portfolio, particularly the on! nicotine pouch brand, which has shown significant growth in shipment volumes and market share [1][2][9] - The company's oral tobacco revenues increased by 0.5% to $654 million in Q1 2025, driven by pricing power despite macroeconomic challenges [2] - Altria faces challenges in the vapor segment, particularly after regulatory issues led to the discontinuation of its NJOY ACE product, but plans to introduce compliant alternatives [3][4] Oral Tobacco Performance - The on! nicotine pouch brand's shipment volumes rose 18% year-over-year, exceeding 39 million cans, and its market share in the oral tobacco category increased by 1.8 percentage points to 8.8% [1][9] - The nicotine pouch market share for on! reached 17.9%, indicating strong consumer loyalty and brand strength despite retail price increases [1] Vapor Segment Challenges - Regulatory setbacks have impacted Altria's vapor products, leading to the discontinuation of NJOY ACE, but the company is working on launching new compliant products to regain market share [3][4] Competitive Landscape - Altria competes with Philip Morris International and British American Tobacco in the smoke-free category, both of which are also focusing on reduced-risk products [5][6][7] - Philip Morris reported a 20.4% increase in net revenues and a 33.1% rise in smoke-free gross profit, with significant growth in its ZYN and VEEV products [6] - British American Tobacco aims for 50 million consumers by 2030 and reported a 2.5% increase in New Category revenues in 2024 [7] Financial Performance and Valuation - Altria's stock has gained 12.5% year-to-date, while the industry has grown by 37.7% [8] - The company trades at a forward price-to-earnings ratio of 10.76X, below the industry average of 15.36X [11] - Earnings estimates for 2025 and 2026 suggest year-over-year growth of 4.9% and 3.3%, respectively, with recent upward revisions [12]

Core Insights - Altria Group, Inc. is facing significant challenges as it transitions towards smoke-free alternatives, primarily due to the rise of illicit flavored disposable e-vapor products that are reshaping the U.S. nicotine market [1][3]. Company Performance - In Q1 2025, Altria reported that the adult e-vapor user base in the U.S. has exceeded 20 million, with a year-over-year increase of over 2.6 million users, largely driven by disposable e-vapor products which gained nearly 4 million new users, reaching around 14 million [2]. - Altria estimates that over 60% of the expanding e-vapor market is now dominated by unauthorized, non-compliant products, which poses a significant challenge to its smoke-free revenue growth [2][10]. Market Dynamics - The surge in illicit e-vapor products is a major obstacle for Altria's smoke-free revenue growth, dampening its progress despite an increasing market presence [3]. - The company is collaborating with regulators to address enforcement gaps, but the ongoing availability of illicit products remains a significant barrier [4]. Competitive Landscape - Major tobacco companies like Philip Morris International and British American Tobacco are also accelerating their transition towards smoke-free alternatives, investing in reduced-risk products to adapt to changing consumer preferences and regulatory landscapes [6]. - Philip Morris reported that smoke-free offerings contributed 44% of its gross profit in Q1 2025, with a 20.4% rise in net revenues and a 33.1% increase in smoke-free gross profit [7]. - British American Tobacco aims to reach 50 million consumers by 2030, with its smokeless user base reaching 29.1 million in 2024 [8]. Financial Metrics - Altria's shares have gained 14.4% year-to-date, compared to the industry's growth of 40.8% [9]. - The company trades at a forward price-to-earnings ratio of 10.96X, below the industry average of 15.74X, with a forecasted EPS growth of 5.3% for 2025 [10][12]. - The Zacks Consensus Estimate for Altria's 2025 earnings implies a year-over-year growth of 5.3%, while the 2026 earnings estimate suggests an increase of almost 3% [13].

Core Insights - Philip Morris International Inc. (PM) is accelerating its transition from traditional tobacco to reduced-risk products, with smoke-free products accounting for 44% of total gross profit in Q1 2025, indicating significant progress towards becoming substantially smoke-free [1][8] Group 1: Product Performance - IQOS, PM's heat-not-burn device, achieved 9.4% growth in HTU-adjusted IMS, driven by strong performances in Japan and Europe [2] - ZYN, the oral nicotine pouch acquired from Swedish Match, saw shipments increase by 53% year-over-year to 202 million cans, with PM raising its 2025 shipment forecast to 800-840 million cans [2][8] Group 2: Financial Metrics - Smoke-free organic revenues increased by 20.4%, while gross profit rose by 33.1%, resulting in a gross margin exceeding 70%, significantly higher than combustible products [3][8] - PM's shares have increased by 52.3% year-to-date, outperforming the industry growth of 37% [7] Group 3: Competitive Landscape - Altria is expanding its smoke-free portfolio, with on! nicotine pouch shipments rising 18% year-over-year, contributing to $654 million in net revenues for its Oral Tobacco segment [5] - British American Tobacco aims for 50 million users of smoke-free products by 2030 and plans to derive 50% of revenues from this segment by 2035, with its New Category segment growing by 2.5% in 2024 [6] Group 4: Future Outlook - PM is well-positioned for future growth with strategic manufacturing investments in the U.S. and a multi-category strategy that includes e-vapor products [4] - The Zacks Consensus Estimate for PM's 2025 earnings suggests a year-over-year growth of 13.7%, with 2026 earnings expected to increase by 11.7% [12]