Altria (NYSE: MO) closed out a solid 2024, but challenges lie ahead. The tobacco giant reported an adjusted EPS of $5.12, marking a 3.4% annual increase. However, its 2025 guidance of $5.22 to $5.37 signals slower growth, with the midpoint falling short of Wall Street expectations.
Shares of Altria Group fell Thursday morning 2.8% to $51.19. The cigarette manufacturer reported earnings per share of $1.29 on revenue of $5.1 billion, in line with FactSet consensus estimates.
Cigarette sales continue to decline, with volumes dropping 8.8% in Q4 as more smokers shift to vaping and lower-cost brands. Altria management attributed this to the broader industry’s decline rate, which has been spurred on by “the growth of illicit e-vapor products.”
The sale of flavored vaping devices is banned or restricted in nine states, while popular products marketed under names like Elf Bar and Lost Mary lack authorization from the U.S. Food and Drug Administration.
As of January 2025, only three manufacturers are permitted to sell e-cigarettes in the U.S., including NJOY. The 23 authorized products are tobacco- or menthol-flavored.
Illicit products are “clearly the winner in the marketplace,” CEO Billy Gifford said during Thursday’s earnings call.
He said the company was reassessing its financial targets for NJOY and would provide updates “when we have more clarity on how the illegitimate e-vapor market may evolve.”
Meanwhile, regulatory pressures are mounting, including a proposed cap on nicotine levels in cigarettes. However, the Trump Administration has placed that directive on an indefinite hold.
Adding to the uncertainty, Altria’s smoke-free strategy faces a setback after its NJOY devices were banned from U.S. imports due to a patent dispute with Juul Labs. The U.S. International Trade Commission found that NJOY’s ACE devices violated Juul Labs’ patent rights in vaporizer innovations on Wednesday.
As a result, an import ban will take effect in 60 days unless the Office of the U.S. Trade Representative in President Donald Trump’s new administration overturns it for public policy reasons. The ruling poses a significant challenge to Altria’s future plans for reduced-risk products, reports Guru Focus.
Still, Altria isn’t backing down. It just completed a massive $3.4 billion share buyback and has another $1 billion in repurchases planned through 2025. As for dividends, the company paid out $6.8 billion last year, reinforcing its appeal to income-focused investors.
However, NJOY—a once-promising growth driver—has become a wildcard. Illicit disposable vapes now control over 60% of the market, making it increasingly difficult for legal alternatives to compete. Altria acknowledges that this shifting landscape could force a reassessment of its 2028 smoke-free targets.
The key question: Can NJOY adapt quickly enough to stay relevant, or will regulatory hurdles and black-market dominance stifle its growth?
For investors, Altria remains a cash-generating machine, but its long-term strategy is getting more complex. The company expects to invest up to $225 million in capital expenditures this year, balancing strong tobacco margins with efforts to expand its reduced-risk portfolio.
It’s also aiming for mid-single-digit EPS growth through 2028—but that depends on navigating an unpredictable regulatory and competitive environment. With cigarette sales declining, uncertainty in the vape market growing, and increasing regulatory pressure, Altria’s next steps could determine whether it remains a dividend powerhouse or faces a tough battle to maintain its relevance.
