Can Oral Nicotine Become Altria's Next Major Growth Engine?

Altria Group, Inc.’s MO smoke-free strategy is increasingly anchored in the trajectory of its oral nicotine portfolio. On its fourth-quarter 2025 earnings call, management highlighted the oral tobacco category as a standout growth pocket, noting that nicotine pouches drove an estimated 14% volume increase over the past six months. 

By the fourth quarter of 2025, oral nicotine pouches accounted for nearly 57% of the total oral category, gaining 10.4 share points year over year, a decisive signal that consumer migration within oral tobacco is accelerating.

Against this backdrop, Altria’s flagship pouch brand, on!, showed resilience despite intense competitive discounting. While broader category pricing declined roughly 12% year over year, on! implemented a 3% price increase, underscoring a disciplined approach to protecting margins while sustaining consumer engagement. For full-year 2025, on! shipment volumes grew 10.9% to more than 177 million cans, maintaining an 8.2% retail share of the total oral tobacco category, an increase of 0.1 share point compared with the prior year.

Momentum could strengthen further in 2026 with the national launch of on! PLUS in the first half of the year. This premium "wet" pouch offering recently received FDA marketing authorization for three varieties, positioning Altria to compete in high-velocity segments like superior mouthfeel and higher nicotine strengths. 

As innovation deepens and distribution expands, oral nicotine is positioning itself as a scalable and increasingly material contributor within Altria’s smoke-free portfolio.

MO Versus PM and TPB in Modern Oral

Philip Morris International Inc. PM has successfully positioned its smoke-free business as a primary growth engine, with net revenues from this segment reaching $16.9 billion in 2025. Momentum was fueled by the continued global expansion of Philip Morris’ IQOS and a robust surge in U.S. ZYN shipments. As a result, smoke-free products contributed 41.5% of total revenues for the year. The sustained performance of these alternatives highlights their increasingly central role in Philip Morris’ overall business mix.

Turning Point Brands, Inc. TPB is rapidly scaling its Modern Oral segment into a primary growth engine, with third-quarter 2025 net sales for the category surging 627.6% year over year. By the end of the third quarter, white nicotine pouches accounted for 30.8% of total business, fueled by the explosive momentum of the FRE and ALP brands. Consequently, Turning Point Brands increased its full-year 2025 Modern Oral sales guidance to $125-$130 million. This momentum reflects Turning Point Brands’ increasing strategic emphasis on the fast-growing nicotine pouch category.

Altria’s Price Performance, Valuation & Estimates

Shares of Altria have gained 10.9% in the past month compared with the industry’s growth of 5%.

From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 12.32X, down from the industry’s average of 16.2X.

The Zacks Consensus Estimate for MO’s 2026 and 2027 earnings per share has inched down 1 cent to $5.57 and up 5 cents to $5.76, respectively, in the past 30 days.

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