Core Insights - Altria Group, Inc. (MO) has achieved a 21.2% gain over the past six months, outperforming the Zacks Consumer Staples sector's growth of 10.7% and the S&P 500's advance of 6.3% [1] - The stock is trading near its 52-week high of $60.25, just 1.6% below the peak reached on May 7, 2025, indicating strong upward momentum [4] - Altria's strong performance is attributed to robust pricing power in its core combustible tobacco segment, particularly with its flagship brand, Marlboro, which commands a 10.8% net price realization [8][9] Performance Comparison - Altria's stock performance is strong relative to major tobacco players, with Philip Morris International Inc. (PM) surging 51.2%, Turning Point Brands, Inc. (TPB) gaining 28.5%, and British American Tobacco p.l.c. (BTI) increasing by 37% over the same period [3] - The stock's position above key technical benchmarks, including the 50-day and 200-day moving averages, suggests sustained bullish momentum [4][5] Financial Metrics - Altria repurchased 5.7 million shares and paid $1.7 billion in dividends in the first quarter of 2025, reinforcing its commitment to shareholder returns [6][12] - The company's forward 12-month P/E ratio is 11.03, which is attractive compared to the industry average of 15.28, positioning Altria as a compelling value opportunity [13][15] Growth Drivers - The Marlboro brand expanded its share of the premium category to 59.3% in the first quarter, supported by advanced Revenue Growth Management tools [9] - Altria's smoke-free product line, particularly the oral nicotine pouch brand on!, saw an 18% increase in shipments, capturing 8.8% of the oral tobacco category and 17.9% of the nicotine pouch segment [10] - The company is addressing regulatory challenges in the e-vapor category and is committed to refining its product pipeline for future market re-entry [11] Investment Outlook - Altria's combination of strong pricing power, growth in smoke-free products, and a proactive approach to regulatory challenges positions it well for long-term performance [18] - The stock is viewed as a solid opportunity for value and income-focused investors, particularly given its discounted valuation and attractive dividend yield [18]

Core Insights - Altria Group, Inc. is focusing on its oral nicotine pouch brand on! to enhance its presence in the smoke-free category, achieving over 18% shipment growth in Q1 2025 and increasing its market share to 8.8% [1][7] - The brand on! has captured 17.9% of the nicotine pouch segment, reflecting its strength despite competitive pressures and rising prices [1][7] - Strategic investments, particularly the "It's On!" marketing campaign, have significantly boosted consumer awareness, now exceeding 60% [2] Company Performance - Altria's shipment growth for on! is attributed to effective marketing and the upcoming launch of on! PLUS, targeting a key demographic for expansion [2][3] - The company is well-positioned for future growth through disciplined pricing strategies, brand equity, and planned innovations [3] - Altria's stock has gained 1.5% over the past month, contrasting with a 0.2% decline in the industry [6] Peer Comparison - Philip Morris continues to lead the nicotine pouch market with ZYN, reporting a 63% year-over-year increase in shipments, reaching over 200 million cans in Q1 2025 [4] - Turning Point Brands is also gaining traction with its modern oral products, forecasting nearly 10x year-over-year growth and expanding its sales force [5] Valuation and Earnings Estimates - Altria trades at a forward price-to-earnings ratio of 10.84X, below the industry average of 15.11X [8] - The Zacks Consensus Estimate indicates year-over-year earnings growth of 4.9% for 2025 and 3.3% for 2026 [9]

Key Takeaways PM's smoke-free portfolio made up 44% of gross profit in Q1, hitting a key transition milestone. PM's smoke-free gross margin surpassed 70%, over 5 percentage points above combustible products. Smoke-free gross profit rose 33% YoY, outpacing volume gains and boosting operating income margin.Philip Morris International (PM) is redefining its profit engine through the accelerated growth of the smoke-free portfolio. In the first quarter of 2025, smoke-free products contributed 44% of the compan ...

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 - The tobacco sector in 2025 presents two main investment options: Altria Group, Inc. and Philip Morris International Inc., each with distinct strategies and market focuses [1][2] Philip Morris Overview - Philip Morris is leading the transition to reduced-risk products (RRPs) with its flagship product IQOS, which has gained significant traction in international markets, contributing to volume growth and solidifying its leadership in the global RRP segment [3][4] - The acquisition of Swedish Match in 2022 expanded Philip Morris's smoke-free portfolio, with smoke-free products accounting for 42% of total revenues and 44% of gross profit in Q1 2025, reflecting a 15% year-over-year revenue growth in this segment [4][5] - Despite a focus on RRPs, Philip Morris also reported a 3.8% organic revenue growth in its traditional tobacco segment, demonstrating a balanced strategy between legacy products and innovation [5] Altria Overview - Altria has shown resilience against declining cigarette volumes through strong pricing power, with projected adjusted earnings per share for 2025 ranging from $5.30 to $5.45, indicating up to 5% year-over-year growth [10][12] - The company is making progress in the smoke-free market with its on! nicotine pouch product, which saw an 18% year-over-year shipment growth in Q1 2025, capturing significant market share despite higher retail prices [11] - Altria's recent acquisition of NJOY aims to strengthen its position in the e-vapor category, with plans for a relaunch focused on regulatory compliance and product quality [12][13] Valuation and Performance Comparison - Philip Morris trades at a forward P/E of 22.76x, reflecting a premium valuation due to its global presence and smoke-free momentum, while Altria trades at a lower multiple of 10.79x, appealing to value-focused investors [15] - Over the past year, Philip Morris has achieved a 76.1% stock gain, significantly outperforming Altria's 27.1% and the S&P 500's 10.8% return, indicating strong investor confidence in Philip Morris [17] Investor Considerations - Philip Morris is recognized for its leadership in RRPs and innovation, but its success may be largely priced in, with potential regulatory and currency risks [18] - Altria, while facing challenges in cigarette volumes, presents a compelling value proposition with lower valuation metrics and growth potential in smoke-free products and the vapor category [18]

Industry Overview - The Zacks Tobacco industry is shifting towards smoke-free alternatives due to increased consumer health awareness and stricter regulations on traditional cigarettes [1][4] - Major companies like Philip Morris International, Altria Group, and Turning Point Brands are investing in reduced-risk products (RRPs) to cater to the demand for healthier nicotine options [1][4] Market Trends - The popularity of smoke-free options, such as heated tobacco and vaping products, is reshaping the industry as consumers seek safer alternatives [4] - Tobacco companies are leveraging strong pricing power to maintain revenues despite declining cigarette sales, as loyal consumers tend to absorb price increases [2][5] Challenges - The industry faces challenges in cigarette sales volumes due to inflation and changing consumer behavior, alongside regulatory restrictions impacting sales and advertising [6] Industry Performance - The Zacks Tobacco industry ranks 65, placing it in the top 27% of over 250 Zacks industries, indicating positive near-term prospects [7][8] - The industry has outperformed the broader market, gaining 63.8% over the past year compared to the S&P 500's 9.8% increase [10] Valuation - The industry is currently trading at a forward P/E of 15.78X, lower than the S&P 500's 21.89X and the sector's 17.62X [13] Company Highlights - **Altria Group**: Focused on transitioning to a smoke-free future with its oral nicotine pouch brand, on!, and has seen a 29.3% increase in shares over the past year [15][17] - **Philip Morris International**: Leading in RRPs with products like IQOS and ZYN, shares have surged 81% in the past year [20][21] - **Turning Point Brands**: Gaining traction with innovative products and strong demand for smokeless alternatives, shares have skyrocketed 132.8% in the past year [24][25]

Key Takeaways Altria Group, Inc. (MO) is currently trading at an attractive discount compared to its industry peers and the broader market, making it a potential value pick for long-term investors. MO stock trades at a forward 12- month price-to-earnings (P/E) ratio of 10.81, notably lower than the industry average of 15.73 and the S&P 500's average of 21.85. Backing this valuation, the stock holds a Zacks Value Score of B, underscoring its strong fundamentals and appealing valuation profile. Image Source: ...

Key Takeaways PM's smoke-free products made up 44% of Q1 gross profit, led by IQOS and ZYN shipments. ZYN shipments soared 53% in Q1, with PM raising 2025 shipment guidance to 800-840 million cans. PM's smoke-free gross margin topped 70%, far exceeding combustibles, with products in 95 markets.Philip Morris International Inc. (PM) is accelerating its shift from traditional tobacco to reduced-risk products, with strong momentum in its flagship offerings — IQOS and ZYN. In the first quarter of 2025, smoke-f ...

Key Takeaways MO's cigarette volumes dropped 13.7% in Q1 2025, with smokeable revenues down 5.8% to $4.62 billion. Economic strain and illicit e-vapor use hurt Marlboro's share and boosted discount brand gains. MO's smokeable struggles highlight the urgency to accelerate its shift toward smoke-free alternatives.Altria Group, Inc. (MO) is facing growing pressure in its core smokeable products segment, with recent data highlighting a sharp decline in cigarette volumes. In first-quarter 2025, domestic cigare ...

Key Takeaways on! pouch shipments rose 18% in Q1 2025, hitting over 39 million cans and gaining market traction. on! gained 1.8 share points in oral tobacco and 0.5 in nicotine pouches in Q1, signaling growing demand. Oral Tobacco revenues rose to $654M, up 0.5% year over year in Q1, driven by strong pricing execution.Altria Group, Inc. (MO) is making steady progress toward a smoke-free future, with its oral nicotine pouch brand on! emerging as a key growth driver. As consumer preferences shift toward red ...