MO's on! Hits 8.7% Oral Tobacco Share: Can It Fend Off Competitors?

Altria Group, Inc.’s (MO) investment in the smoke-free future is anchored by its on! nicotine pouches, which were the primary driver of growth in the oral tobacco products segment for the second quarter of 2025. The brand’s strong performance pushed its retail share of the total U.S. oral tobacco category to 8.7%, reflecting a 0.7 share point increase compared with the prior year. Within the rapidly expanding nicotine pouch category specifically, on! is dominant, now representing more than half of the category after growing 10 share points year over year.

The impressive growth was underlined by a 26.5% increase in reported shipment volume in the second quarter, reaching 52.1 million cans. This increase drove the majority of the segment’s substantial profit growth for the quarter.

The key question remains how Altria can maintain this momentum in an increasingly competitive environment. The company’s strategy, executed by its subsidiary Helix, focuses on aggressive brand-building to differentiate on! from rivals and build emotional connections with adult consumers.

This involves high-impact, in-person activations at events such as NASCAR races and music festivals, reaching more than 170,000 adult tobacco consumers in the first half of the year. Combined with 190 million digital impressions in the second quarter, these initiatives lifted on!’s brand awareness by 7 percentage points in the first half of 2025. Altria is focused on driving trial, building long-term equity and increasing profitability to cement on!'s competitive advantage in the fast-growing smoke-free market.

How PM & TPB Stack Up Against Altria

Philip Morris International Inc. (PM) continues to accelerate its transformation, with smoke-free products driving 41% of total net revenues and more than 42% of gross profit in the second quarter of 2025. Smoke-free business of Philip Morris, spanning IQOS, ZYN and VEEV, delivered 11.8% shipment growth and a 23.3% jump in gross profit. With availability across 97 markets, Philip Morris is leveraging scale, innovation and category breadth to reinforce its leadership in the global smoke-free transition.

Turning Point Brands, Inc. (TPB) is rapidly emerging as a serious contender in the modern oral nicotine space, fueled by breakout performance from its FRE and ALP pouch brands. In the second quarter of 2025, Turning Point Brands’ Modern Oral sales surged nearly eightfold year over year to $30.1 million, accounting for 26% of total revenues. Turning Point Brands raised its full-year Modern Oral sales outlook to $100-$110 million, indicating continued confidence in the category’s long-term growth potential.

Altria’s Price Performance, Valuation & Estimates

Shares of Altria have gained 15.4% in the past three months against the industry’s decline of 4.3%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 12.05X, down from the industry’s average of 14.27X.

The Zacks Consensus Estimate for MO’s 2025 and 2026 earnings implies year-over-year growth of 6.1% and 2.6%, respectively.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research