There hasn't been, and may never be, a more resilient industry than tobacco. Despite smoking rates in the United States peaking many decades ago, the top tobacco stocks are still megacap behemoths that pay and raise shareholder dividends each year. Among them are Altria Group (MO 0.12%) and Philip Morris International (PM +0.08%), former sister companies that sell Marlboro cigarettes in the United States and internationally.The companies have diverged significantly since separating in 2008. Today, emerging ...

Westin: This is a story about the many faces of a single vice. For more than a century, tobacco has been one of the most regulated industries in the global economy. And with every new regulation, it's come back in a different form.Now, tobacco firms are adapting again sidelining cigarettes in favor of smoke-free products. They call it "harm reduction." And are finding some business success. But critics say the long-term health effects are still unknown.Our colleague, Michael McKee, takes us to Switzerland. ...

Core Insights - The tobacco industry is transitioning from traditional cigarettes to smoke-free products, emphasizing "harm reduction" as a new business strategy [1][2] - Smoke-free products are now consumed by over 100 million people globally, with projections indicating significant revenue growth by 2030 [2] - Despite the industry's shift, critics express concerns about the long-term health effects of these new products [1][28] Industry Transition - Philip Morris International (PMI) is leading the charge in this transition, with a market capitalization of nearly $300 billion, larger than major companies like Goldman Sachs and Disney [13] - Approximately 40% of PMI's revenues now come from smoke-free products, including Iqos and Zyn, which are designed to be less harmful alternatives to traditional cigarettes [13][16] - Iqos, a heat-not-burn device, has seen a high adoption rate, with 70% of users reportedly stopping smoking entirely after switching [15] Product Overview - Zyn is a tobacco-free nicotine pouch that has gained popularity for its discreet use and variety of flavors, while Iqos replicates the smoking experience without combustion [14][19] - Global shipments of Zyn are expected to double from 421 million in 2023 to an estimated 1 billion by 2026, reflecting a growing demand for nicotine pouches [20] - The nicotine pouch market has experienced over 35% growth in both the U.S. and Europe last year, indicating a strong consumer shift towards these products [20] Health Concerns - Critics argue that while smoke-free products may be less harmful than cigarettes, they still pose health risks due to nicotine addiction [22][27] - Research on the long-term health outcomes of nicotine pouches is still lacking, necessitating further studies to understand their impact [28] - Users have reported health issues related to Zyn, highlighting the potential for addiction and withdrawal symptoms associated with nicotine use [25][29] Market Dynamics - The nicotine market continues to expand as consumers seek alternatives to traditional cigarettes, driven by an innate craving for nicotine [30] - The industry's bet is that nicotine cravings will persist even as cigarette sales decline, suggesting a long-term market for smoke-free products [31]

David Westin: This is "Wall Street Week." I'm David Westin, bringing you stories of capitalism. As Ukraine enters the fifth year of its war with Russia, contributor Chrystia Freeland travels to Kyiv to report on the unintended consequence of giving its tech industry a leg up. And all those AI data centers are creating a golden age for construction.But do we have the workers to meet the demand. Plus, tobacco tries yet another comeback, this time with smokeless alternatives. The CEO of Philip Morris Internati ...

Core Insights - Broyhill Asset Management's fourth-quarter 2025 investor letter emphasizes extreme market concentration and a strong focus on artificial intelligence, which has left many sectors behind [1] - The portfolio has been significantly reshaped and now trades at a substantial discount compared to the broader market, with the firm believing it will benefit as market fundamentals improve [1] - The portfolio declined by 1.4% for the year, underperforming the MSCI ACWI's 22.9% return, indicating a market dominated by momentum rather than fundamentals [1] Company Highlights - Philip Morris International Inc. (NYSE:PM) is highlighted as one of the largest contributors to Broyhill's portfolio, benefiting from the explosive growth of its product Zyn [2][3] - As of February 25, 2026, Philip Morris stock closed at $189.80 per share, with a one-month return of 6.70% and a 52-week gain of 23.23% [2] - The market capitalization of Philip Morris International Inc. is reported at $295.458 billion [2] Investment Perspective - Broyhill Asset Management identifies Philip Morris as a durable business with identifiable catalysts that the market has mispriced, validating the thesis that the transition away from combustible cigarettes will drive a re-rating for the company [3] - Despite acknowledging the potential of Philip Morris as an investment, the firm suggests that certain AI stocks may offer greater upside potential and carry less downside risk [4]

Core Viewpoint - Philip Morris International's stock has shown strong performance in 2026, increasing over 13% year to date, highlighting its status as a leading consumer staples stock despite modest gains post-Q4 earnings report [1] Group 1: Q4 Results - The smoke-free portfolio significantly contributed to Q4 results, with shipments of the nicotine pouch brand Zyn increasing by 18% year over year and U.S. shipments rising by 20% [2] - Sales volumes of heated tobacco units (HTUs), including the Iqos system, grew by 7.5% to 39.4 billion units, with strong growth observed in Japan and Europe, and increasing uptake in major cities outside these regions [2] - Traditional cigarette volumes declined by 2.2% to 149.4 billion units [2] - Organic revenue rose by 3.7% year over year to $10.4 billion, while overall revenue increased by 6.8% [3] - Adjusted earnings per share (EPS) grew by 9.4% to $1.70 [3] Group 2: Future Outlook - The company forecasts organic revenue growth of 5% to 7% and anticipates total industry cigarette and HTU volumes (excluding China and the U.S.) to decline by around 2% [4] - Cigarette volumes are expected to decrease by 3%, impacted by increased excise taxes in Mexico and India, although a recovery is anticipated in Turkey [4] - Smoke-free portfolio volumes are projected to rise by high single digits [4] - Adjusted EPS is projected to be between $8.38 and $8.53, reflecting growth of 11% to 13%, with an adjusted EPS growth of 7.5% to 9.5% expected, resulting in a range of $8.11 to $8.26 [5] - The company anticipates generating $45 billion in operating cash flow over the next three years, with growth expected to accelerate in 2027 due to the end of taxation equalization in Japan for HTUs and the introduction of Iqos in the U.S. pending regulatory approval [6]

Core Viewpoint - Altria's shares declined after reporting flat earnings due to falling cigarette sales and increased competition from unauthorized disposable e-cigarettes [1][3] Financial Performance - Altria's fourth-quarter revenue decreased by 2% to $5.8 billion, primarily due to lower cigarette sales [2] - The adjusted net income was reported at $1.30 per share, which was below Wall Street's expectations of $1.32 per share [3] Market Dynamics - The company faces challenges from unauthorized disposable e-cigarettes that are cheaper and available in various flavors, impacting traditional cigarette sales [2] - Altria's on! pouches market share fell to approximately 13%, down about 5 percentage points from the previous year [5] Competitive Landscape - The U.S. pouch market is led by Zyn from Philip Morris International, which holds over two-thirds of the market share [6] - Altria is experiencing pricing competition from Philip Morris, including promotional sales for Zyn [6] Strategic Initiatives - Altria is working on diversifying its business into next-generation products like e-cigarettes and nicotine pouches, although it is not a market leader in these areas [4] - The company plans to implement pricing strategies and introductory promotions as it expands its nicotine pouches nationally later this year [6][7]

Amazon - Amazon's stock has seen less than 40% growth over the past five years, but it may be a good time to add to positions as it approaches 2026 [3] - The North American segment's adjusted operating income increased by 28% last quarter with only an 11% rise in sales, showcasing strong operating leverage driven by robotics and AI [4] - Amazon operates over 1 million robots in its fulfillment centers, coordinated by its DeepFleet AI model, enhancing its efficiency [5] - The company has become a leading digital marketing firm, with its sponsored ad program growing revenue by 24% in Q3, aided by AI [6] - Amazon Web Services (AWS) is expected to be a significant growth driver, with heavy investments in AI data centers to meet increasing demand [7] - The stock is attractively valued with a forward P/E ratio of less than 30 times 2026 estimates, making it a strong candidate for investment [8] Philip Morris International - Philip Morris stock has increased by around 35% this year but has been stagnant since summer, presenting a potential opportunity for investors [9] - The company does not sell cigarettes in the declining U.S. market, benefiting from stronger international volumes and pricing power [10] - The smokeless product portfolio, particularly the nicotine pouch brand Zyn, has seen shipments soar by 37% in the U.S. and retail sales volumes increase by 39% [12] - The heated tobacco product Iqos has also experienced a 15.5% volume growth in Q3, particularly in Japan and Europe [13] - Philip Morris is awaiting FDA approval for its new Iluma delivery system in the U.S., which could further enhance growth prospects [14] - The stock is valued at a forward P/E ratio of under 19.5 and a PEG ratio of 0.85, indicating it may be undervalued [15]

Sector Overview - Vice stocks experienced mixed performance in 2025, with Philip Morris International rising nearly 34% and AB InBev increasing about 29%, while Molson Coors fell 18% [1] - Despite challenges, vice stocks are considered "recession-proof" and are expected to remain resilient in the market [2] Cannabis Industry - President Trump signed an executive order reclassifying marijuana from Schedule 1 to Schedule 3, marking a significant regulatory change for the cannabis sector [4] - Companies in the cannabis industry are facing difficulties accessing financial services and capital, leading to investor wariness [4] Nicotine Market - The shift towards smokeless products is evident, with 41% of Philip Morris's revenue derived from smoke-free products like Zyn [4] - Philip Morris successfully defended against a class-action lawsuit regarding pricing practices for Zyn, the only FDA-approved nicotine pouch [4] Alcohol Sector - Sales of beer, wine, and spirits are declining, with Molson Coors reporting a loss of $2.9 billion in the fall quarter and anticipating a 4% sales drop this year [4] - AB InBev reported its slowest profit growth since 2021, while the industry faces challenges from the "sober-curious" trend [4]

Group 1: Company Overview - Philip Morris International (PMI) was formed from the international operations of Altria in 2008 and primarily sells cigarettes and reduced-risk products outside of the US [8] - The company has expanded its portfolio with the 2023 acquisition of Swedish Match, enhancing its presence in traditional oral tobacco products and nicotine pouches [8] Group 2: Market Position and Analyst Insights - Analysts have set an average target price of $185.0 for Philip Morris International, indicating a positive outlook [9] - JP Morgan maintains an Overweight rating for the stock, aligning with the target price of $185 [10] Group 3: Options Trading Activity - Recent options trading shows a bullish sentiment with 53% of traders favoring calls, while 23% were bearish [1] - The average open interest for options stands at 687.0, with a total volume of 20,417.00, indicating significant trading activity [3] - Whales have targeted a price range from $80.0 to $200.0 for Philip Morris International over the last three months [2] Group 4: Recent Trading Performance - The current stock price of Philip Morris International is $162.66, reflecting a 0.37% increase with a trading volume of 1,753,973 [12] - RSI indicators suggest that the stock may be approaching overbought conditions [12]