Altria's on! PLUS Launch Fuels Oral Tobacco Profit Gains: What's Next?

Altria Group, Inc.’s (MO) oral tobacco segment delivered a notable margin performance in the third quarter of 2025, powered by Helix’s steady execution. Helix recently launched on! PLUS, a next-generation nicotine pouch, in Florida, North Carolina and Texas. Available in three flavors, mint, wintergreen and tobacco, and three nicotine strengths (6 mg, 9 mg and 12 mg), the product is positioned as a premium complement to the core on! lineup.

While total oral tobacco domestic shipment volumes declined 9.6%, reflecting retail share losses, calendar timing differences, trade inventory movements and other factors, partly offset by industry growth, the segment’s adjusted operating companies income (“OCI”) margin expanded 2.4 percentage points to 69.2%. Management noted that Helix’s year-over-year performance made a meaningful contribution to the segment’s OCI stability and margin expansion.

The launch comes amid aggressive price competition, with average nicotine-pouch prices down 7% nationally, yet on! managed to lift retail prices by roughly 1.5% in the third quarter. This pricing dynamic, combined with lower costs, helped offset shipment pressures during the quarter.

The on! PLUS product itself focuses on consumer comfort, nicotine delivery and flavor satisfaction, three attributes that early testing showed outperforming rival brands. With the FDA including on! PLUS in its pilot program to streamline pouch reviews, Altria may gain regulatory momentum. Management remains cautious on expansion timing, noting that it is early days for the launch but expressing optimism about the product’s differentiation and market potential.

How PM and TPB Stack Up Against MO in Oral Nicotine

Philip Morris International Inc. (PM) continues to lead the global oral nicotine transition with ZYN, showing how product innovation and scale can drive profitability. In the third quarter of 2025, Philip Morris grew smoke-free net revenues 17.7% (13.9% organically) and expanded gross margin. Philip Morris is investing in flavor range, lower-strength options and marketing to strengthen ZYN’s category leadership, reinforcing its dominance in oral nicotine margins.

Turning Point Brands, Inc. (TPB) is rapidly expanding its presence in the modern oral nicotine space, led by the FRE and ALP pouch brands. In the second quarter of 2025, Turning Point Brands reported nearly eightfold year-over-year growth in modern oral revenues, reaching $30.1 million. The company lifted its full-year modern oral guidance to $100-$110 million. Through innovation in flavor, texture and strength, Turning Point Brands continues to strengthen its competitive foothold in the U.S. market.

Altria’s Price Performance, Valuation & Estimates

Shares of Altria have lost 13.5% in the past month compared with the industry’s decline of 7.1%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 10.3X, down from the industry’s average of 13.79X.

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 #2 (Buy). 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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