VEEV Volumes Double: Will Philip Morris' E-Vapor Bet Pay Off?

Philip Morris International (PM) saw its e-vapor brand VEEV more than double shipment volumes year over year in the second quarter of 2025, a striking development in the multi-category smoke-free strategy. With nearly 1.5 billion equivalent units shipped in the first half of 2025, VEEV is increasingly emerging as a viable growth engine alongside the more mature IQOS and ZYN brands.

Europe remains the driving force behind VEEV’s success, where it now holds the #1 closed pod position in six markets, including Italy and Greece. PM’s profitability-driven rollout strategy is gaining traction, further boosted by repeat purchase rates and rising consumer loyalty, indicators of deeper market penetration.

PM recently launched its latest innovation, VEEV inPRIME, in the Czech Republic. The product offers an upgraded premium user experience with enhanced flavor intensity, larger vapor clouds and extended battery life, all with an optimized pod cost profile. The launch reflects PM’s continued push to elevate user satisfaction and strengthen VEEV’s premium positioning within its smoke-free portfolio.

Beyond Europe, early traction in Indonesia, Canada and Colombia highlights the brand’s global potential, with further rollouts underway. Importantly, PM seeks to leverage its multi-category infrastructure under the IQOS umbrella, defined by quality, premiumness and superior technology, to support VEEV’s expansion and build consumer loyalty across markets.

While still smaller in scale than PM’s flagship offerings, VEEV’s accelerating volumes and improving unit economics indicate growing traction. As the company continues to expand its smoke-free portfolio, VEEV’s progress will be worth watching, particularly amid ongoing shifts in consumer preferences and regulatory landscapes.

PM’s Competition in E-Vapor, Oral Nicotine Growth

Altria Group, Inc. (MO) is actively revamping its NJOY product line, aiming to re-enter the e-vapor market with a redesigned device while expanding the vapor portfolio. However, Altria Group continues to face regulatory hurdles and patent litigation that may delay its timeline. Meanwhile, Altria Group’s oral nicotine brand, on!, gained 10 share points year over year in the second quarter of 2025, driving significant profit growth in the oral segment.

In contrast, Turning Point Brands, Inc. (TPB) reported nearly 10x year-over-year growth in white nicotine pouch sales, generating $22.3 million in revenues in the first quarter of 2025. Turning Point Brands credited this surge to the launch of ALP and expanded distribution of FRE. Building on this momentum, Turning Point Brands raised its full-year modern oral sales guidance to $80-$95 million, indicating strong consumer uptake and aggressive retail expansion.

PM’s Price Performance, Valuation & Estimates

Shares of Philip Morris have lost 10% in the past month compared with the industry’s decline of 2.9%.

From a valuation standpoint, PM trades at a forward price-to-earnings ratio of 20.3X, up from the industry’s average of 14.7X.

The Zacks Consensus Estimate for PM’s 2025 and 2026 earnings implies year-over-year growth of 14% and 12%, respectively.

Philip Morris currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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