Altria's Smoke-Free Push: Is It Finally Gaining Real Momentum?

Altria Group, Inc. MO is signaling a notable shift in the business mix as it accelerates to push into smoke-free products to offset ongoing declines in combustible volumes. The third quarter of 2025 highlighted steady progress in this transition, particularly within oral nicotine and heated tobacco, two areas management continues to prioritize.

Oral nicotine remains a key driver of momentum. The on! nicotine pouch brand maintained a stable retail share of 8.7% during the quarter. Performance was stronger on a year-to-date basis, with on! shipment volumes rising 14.8% to 133.6 million cans over the first nine months of 2025. This consistency suggests that on! is holding its ground in a crowded category rather than relying solely on short-term promotions.

To build on this base, Altria recently introduced on! PLUS in select U.S. markets, namely Florida, North Carolina, and Texas. Positioned as a premium offering, the product is designed to appeal both to existing smokeless users and to adult consumers migrating from competing pouch brands. Management views this launch as an important step in broadening its oral nicotine portfolio and improving consumer choice.

Beyond oral nicotine, Altria reached a pivotal regulatory stage for heated tobacco. Horizon filed a combined premarket tobacco product application and modified risk tobacco product application with the FDA in August for the Ploom device and Marlboro heated tobacco sticks. This submission is a foundational step for introducing Ploom to American smokers.  Overall, Altria’s recent updates suggest its smoke-free strategy is advancing through measured execution rather than rapid expansion.

How MO’s Smoke-Free Push Stacks Up Against Key Peers

Philip Morris International Inc. PM continues to demonstrate scale-driven momentum in smoke-free products, led by IQOS and ZYN. In the third quarter of 2025, Philip Morris’ smoke-free shipment volumes rose 16.6%, with heated tobacco unit shipments up 15.5% and nicotine pouch volumes accelerating globally. Philip Morris’ Smoke-free products now account for 41% of total net revenues, reflecting continued progress across its smoke-free product portfolio.

Turning Point Brands, Inc. TPB continues to build its smoke-free presence through oral nicotine, with modern oral products emerging as a key growth driver. In the third quarter of 2025, Turning Point Brands’ Modern Oral sales surged 627.6% year over year and accounted for 30.8% of total business. Overall, Turning Point Brands’ performance reflects strong traction in oral nicotine as an increasingly important component of its broader smoke-free strategy.

Altria’s Price Performance, Valuation & Estimates

Shares of Altria have gained 8.3% in the past month compared with the industry’s growth of 9.2%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 11.09X, down from the industry’s average of 15.3X.

The Zacks Consensus Estimate for MO’s current and next financial years’ earnings implies year-over-year growth of 6.3% and 2.3%, 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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