Bear of the Day: Turning Point Brands (TPB)

Sometimes a company can be growing sales, have an interesting product portfolio, and still end up on the wrong side of the Zacks Rank. That’s because our rank is based on what analysts are doing with their estimates compared to other stocks out there in the universe. If recent estimate revisions have been to the downside, it raises a red flag for us. Sometimes, it can be a harbinger of what’s to come. Other times, it’s just a cautionary tale that bulls should actually be made aware of.

That's exactly what we've got with today's Bear of the Day, Turning Point Brands (TPB). Turning Point Brands is the company behind brands including Zig-Zag and Stoker's, along with a growing presence in the modern oral nicotine category. Revenue growth has actually been pretty impressive. The problem isn't necessarily what's happening on the top line.

The problem is what's happening to earnings estimates. And around here, you know that's what pays the bills. Turning Point Brands currently carries a Zacks Rank #5 (Strong Sell), and it doesn't take much digging to figure out why.

Over the last 60 days, the Zacks Consensus Estimate for 2026 earnings has dropped from $1.97 per share to $1.75 per share. The 2027 estimate has also been cut, falling from $2.75 to $2.51 per share. That's the opposite of what you want to see.

Turning Point Brands, Inc. Price and Consensus

Turning Point Brands, Inc. price-consensus-chart | Turning Point Brands, Inc. Quote

Remember, the Zacks Rank isn't sitting around trying to decide whether this is a great company five years from now. It's looking for changes in analyst earnings expectations that can influence shares over the next several months.

Still, even with next year’s Zacks Consensus Estimate coming down to $2.51, it represents growth of 43% year-over-year. If you smooth that out along with this year’s 55% contraction it is less attractive but it’s still better than the alternative.

The Tobacco industry is in the Bottom 12% of our Zacks Industry Rank. There is only one company in this industry that is currently in the good graces of our Zacks Rank. That’s Zacks Rank #2 (Buy) JAPAN TOB (JAPAY). There are several stocks that are Zacks Rank #3 (Hold) stocks including Altria (MO).

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

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