Can KT&G Alliance Drive Altria's Next Global Growth Phase?

Altria Group, Inc.’s (MO) recently announced alliance with KT&G marks a meaningful step in its push to expand beyond the U.S. market. The memorandum of understanding (“MOU”) creates a framework for the two companies to jointly explore international opportunities in modern oral nicotine products, including the potential expansion of Altria’s on! nicotine pouch portfolio into select global markets.

As part of the collaboration, Altria will also acquire an ownership interest in Another Snus Factory, the maker of the LOOP nicotine pouch brand, to broaden product offerings and appeal to consumers in regions where complex flavor profiles are driving growth.

The partnership allows Altria to leverage KT&G’s established global infrastructure and product development expertise while contributing its own strengths in commercialization, regulatory engagement and brand management. Beyond nicotine, the companies are also evaluating opportunities in U.S. non-nicotine products through KT&G’s Korea Ginseng Corporation and assessing potential operational efficiencies in traditional tobacco manufacturing and supply-chain functions.

While the alliance currently remains in a non-binding stage, it reflects a deliberate step toward expanding Altria’s presence in smoke-free categories internationally. The global modern oral market continues to grow rapidly, and collaboration with KT&G could accelerate Altria’s participation by providing access to established distribution networks and product platforms.

Successful execution of the partnership will be key, as Altria seeks to strengthen its position in next-generation products and further the long-term goal of transitioning toward a smoke-free future.

Where PM and TPB Stand Next to Altria

Philip Morris International Inc. (PM) continues to set the global standard in the smoke-free transition, with smoke-free products contributing 41% of net revenues in the third quarter of 2025. Its nicotine pouch brand, ZYN, maintained strong momentum in the United States, delivering 39% offtake growth according to Nielsen data, while Philip Morris’ broader smoke-free portfolio now spans 100 international markets. Philip Morris’ emphasis on category leadership, regulatory readiness and large-scale commercialization reflects its deep investment in next-generation nicotine formats.

Turning Point Brands, Inc. (TPB) continues to accelerate growth through its expanding Modern Oral portfolio, which now represents nearly one-third of sales. In the third quarter of 2025, Turning Point Brands’ revenues rose 31.2% year over year to $119 million, and Modern Oral's net sales surged 627.6% to $36.7 million. Backed by strong margins and upcoming U.S. manufacturing capacity, Turning Point Brands is solidifying its position as a fast-scaling player in the high-growth modern oral category.

Altria’s Price Performance, Valuation & Estimates

Shares of Altria have lost 12.8% in the past month compared with the industry’s decline of 4%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 10.46X, down from the industry’s average of 14.07X.

The Zacks Consensus Estimate for MO’s 2025 and 2026 earnings implies year-over-year growth of 6.1% and 2.5%, 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.

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

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