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MO vs. PM: Which Tobacco Giant Is Winning the Smoke-Free Race?
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Key Takeaways
Altria holds strong U.S. cigarette share while expanding heated tobacco, oral nicotine and e-vapor options.
on! shipments reached 133.6M cans YTD as Ploom filings and on! PLUS enhance MO's smoke-free reach.
Philip Morris' smoke-free products drove 41% of net revenues with a record $3.1B gross profit.
Altria Group, Inc. ((MO - Free Report) ) and Philip Morris International Inc. ((PM - Free Report) ) stand as two of the most influential players in the global tobacco landscape, each commanding strong brand portfolios and pursuing distinct strategic directions. Altria, focused on the U.S. market, continues to generate substantial revenues from the flagship Marlboro cigarettes while broadening its presence in smoke-free and oral nicotine products. In contrast, Philip Morris has become a global leader in reduced-risk innovation, driven by its heated tobacco platform IQOS and an expanding portfolio of nicotine alternatives.
The tobacco industry as a whole is undergoing a significant transformation, shaped by declining traditional cigarette use, tightening regulatory pressures and rising consumer interest in cleaner, smoke-free technologies. Against this backdrop, both MO and PM are accelerating innovation and restructuring their business models to remain competitive. As investors weigh stability against growth-driven potential, the debate continues over which company is best positioned to lead the industry’s evolving future.
The Case for Altria
Altria maintains a dominant position in the U.S. tobacco market, supported by a 45.4% cigarette retail share and Marlboro’s 59.6% leadership in the premium segment in the third quarter of 2025. Despite industry volume pressures, the smokeable segment achieved a 64.4% adjusted operating companies income margin, demonstrating strong pricing power and lower per-unit settlement costs. These fundamentals underpin a resilient earnings base as Altria navigates category declines and shifting adult-consumer behaviors.
Altria’s strategy focuses on reinforcing core profitability while accelerating growth across oral nicotine, heated tobacco and e-vapor platforms. on! shipments reached 133.6 million cans year to date, supported by steady retail takeaway despite heightened competitive discounting. The launch of on! PLUS and Horizon’s FDA filings for Ploom broaden Altria’s smoke-free portfolio, positioning it to meet rising demand for cleaner, well-regulated nicotine alternatives.
The company also reaffirmed its commitment to consistent shareholder value creation in the third quarter. In August 2025, management raised the regular quarterly dividend by 3.9% to $1.06 per share, Altria’s 60th increase in 56 years. The expansion of the share repurchase program to $2 billion through 2026, up from $1 billion, further reflects confidence in earnings stability and long-term financial strength.
Nonetheless, Altria continues to face structural challenges. Domestic cigarette shipment volumes fell 8.2% in the quarter and Marlboro’s total-category share declined to 40.4%, down 1.2 share points year over year. In oral tobacco, Copenhagen and Skoal declined amid intensifying nicotine-pouch competition. Broader marketplace headwinds, evolving consumer preferences and shifting category dynamics continue to pressure volumes, underscoring the importance of sustained innovation and effective execution across smoke-free platforms.
The Case for Philip Morris
Philip Morris’ growth remains firmly anchored in the smoke-free transformation, which continues to reshape its earnings profile. In the third quarter of 2025, smoke-free products accounted for 41% of total net revenues and 42% of gross profit. Shipments advanced 16.6% year over year, led by IQOS, ZYN and VEEV, driving record quarterly smoke-free gross profit of $3.1 billion and reinforcing the company’s long-term profitability trajectory.
IQOS, ZYN and VEEV delivered robust, broad-based growth across major markets. Shipments of IQOS climbed 15.5% to 40.8 billion units in the quarter, sustaining Philip Morris’ 76% global share of heated tobacco units. ZYN shipments surged 37% in the United States to 205 million cans and more than doubled internationally, excluding Nordic countries. VEEV volumes also more than doubled year to date, maintaining its number-one closed-pod position across eight markets.
Operational excellence and disciplined cost management further fueled earnings momentum. Adjusted operating income rose 12.4% to $4.7 billion, with margins expanding 120 basis points to 43.1%. Adjusted EPS increased 17.3% to $2.24, supported by strong IQOS and ZYN performance, resilient combustibles and a favorable tax environment. The company remains on track to deliver $2 billion in cost savings by 2026 and raised full-year EPS growth guidance to 13.5-15.1%.
However, pressure persists within the combustible segment. Cigarette shipment volumes declined 3.2% in the third quarter, partially offset by high-single-digit pricing that lifted net revenues 4.3%. Gross profit increased 7.7%, reflecting pricing strength and cost discipline, but long-term declines in smoking prevalence and regulatory headwinds continue to weigh on the category. Ongoing innovation in smoke-free products remains critical to sustaining growth and offsetting these structural challenges.
How Does the Zacks Consensus Estimate Compare for MO & PM?
The Zacks Consensus Estimate for Altria’s 2025 and 2026 EPS indicates a year-over-year increase of around 6.3% and 2.3%, respectively. The consensus estimate for MO’s 2025 EPS has inched up 1 cent in the past 30 days to $5.44, while the same for 2026 has slipped 1 cent to $5.56.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Philip Morris for 2025 and 2026 EPS implies year-over-year growth of 14.3% and 11.4%, respectively. The consensus estimate for 2025 EPS has inched up 1 cent in the past 30 days to $7.51, while the same for 2026 has remained unchanged at $8.36.
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MO & PM: A Look at Past-Year Stock Performance
Over the past year, shares of Altria have gained 9.3%, while Philip Morris has delivered a stronger 22.7% advance. Currently, MO trades at $58.69, about 14.4% below its 52-week high. PM, at $156.49, sits roughly 16.2% below its peak.
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MO vs. PM: A Peek Into Stock Valuation
Altria is trading at a forward 12-month price-to-earnings (P/E) ratio of 10.57, below its one-year median of 10.81. Meanwhile, Philip Morris’ forward P/E ratio stands at 18.9, also below its median of 20.59.
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MO vs. PM: Which Stock Looks More Promising Now?
Among the leading tobacco firms, Philip Morris stands out as the stronger growth story. Its aggressive shift toward smoke-free products, global scale and disciplined cost strategy are driving sustained earnings and margin expansion. Altria, with its U.S.-centric portfolio, continues to deliver dependable cash flows and shareholder returns. For investors focused on long-term growth and industry transformation, PM is better positioned, while Altria offers stability and consistent performance.
Image: Bigstock
MO vs. PM: Which Tobacco Giant Is Winning the Smoke-Free Race?
Key Takeaways
Altria Group, Inc. ((MO - Free Report) ) and Philip Morris International Inc. ((PM - Free Report) ) stand as two of the most influential players in the global tobacco landscape, each commanding strong brand portfolios and pursuing distinct strategic directions. Altria, focused on the U.S. market, continues to generate substantial revenues from the flagship Marlboro cigarettes while broadening its presence in smoke-free and oral nicotine products. In contrast, Philip Morris has become a global leader in reduced-risk innovation, driven by its heated tobacco platform IQOS and an expanding portfolio of nicotine alternatives.
The tobacco industry as a whole is undergoing a significant transformation, shaped by declining traditional cigarette use, tightening regulatory pressures and rising consumer interest in cleaner, smoke-free technologies. Against this backdrop, both MO and PM are accelerating innovation and restructuring their business models to remain competitive. As investors weigh stability against growth-driven potential, the debate continues over which company is best positioned to lead the industry’s evolving future.
The Case for Altria
Altria maintains a dominant position in the U.S. tobacco market, supported by a 45.4% cigarette retail share and Marlboro’s 59.6% leadership in the premium segment in the third quarter of 2025. Despite industry volume pressures, the smokeable segment achieved a 64.4% adjusted operating companies income margin, demonstrating strong pricing power and lower per-unit settlement costs. These fundamentals underpin a resilient earnings base as Altria navigates category declines and shifting adult-consumer behaviors.
Altria’s strategy focuses on reinforcing core profitability while accelerating growth across oral nicotine, heated tobacco and e-vapor platforms. on! shipments reached 133.6 million cans year to date, supported by steady retail takeaway despite heightened competitive discounting. The launch of on! PLUS and Horizon’s FDA filings for Ploom broaden Altria’s smoke-free portfolio, positioning it to meet rising demand for cleaner, well-regulated nicotine alternatives.
The company also reaffirmed its commitment to consistent shareholder value creation in the third quarter. In August 2025, management raised the regular quarterly dividend by 3.9% to $1.06 per share, Altria’s 60th increase in 56 years. The expansion of the share repurchase program to $2 billion through 2026, up from $1 billion, further reflects confidence in earnings stability and long-term financial strength.
Nonetheless, Altria continues to face structural challenges. Domestic cigarette shipment volumes fell 8.2% in the quarter and Marlboro’s total-category share declined to 40.4%, down 1.2 share points year over year. In oral tobacco, Copenhagen and Skoal declined amid intensifying nicotine-pouch competition. Broader marketplace headwinds, evolving consumer preferences and shifting category dynamics continue to pressure volumes, underscoring the importance of sustained innovation and effective execution across smoke-free platforms.
The Case for Philip Morris
Philip Morris’ growth remains firmly anchored in the smoke-free transformation, which continues to reshape its earnings profile. In the third quarter of 2025, smoke-free products accounted for 41% of total net revenues and 42% of gross profit. Shipments advanced 16.6% year over year, led by IQOS, ZYN and VEEV, driving record quarterly smoke-free gross profit of $3.1 billion and reinforcing the company’s long-term profitability trajectory.
IQOS, ZYN and VEEV delivered robust, broad-based growth across major markets. Shipments of IQOS climbed 15.5% to 40.8 billion units in the quarter, sustaining Philip Morris’ 76% global share of heated tobacco units. ZYN shipments surged 37% in the United States to 205 million cans and more than doubled internationally, excluding Nordic countries. VEEV volumes also more than doubled year to date, maintaining its number-one closed-pod position across eight markets.
Operational excellence and disciplined cost management further fueled earnings momentum. Adjusted operating income rose 12.4% to $4.7 billion, with margins expanding 120 basis points to 43.1%. Adjusted EPS increased 17.3% to $2.24, supported by strong IQOS and ZYN performance, resilient combustibles and a favorable tax environment. The company remains on track to deliver $2 billion in cost savings by 2026 and raised full-year EPS growth guidance to 13.5-15.1%.
However, pressure persists within the combustible segment. Cigarette shipment volumes declined 3.2% in the third quarter, partially offset by high-single-digit pricing that lifted net revenues 4.3%. Gross profit increased 7.7%, reflecting pricing strength and cost discipline, but long-term declines in smoking prevalence and regulatory headwinds continue to weigh on the category. Ongoing innovation in smoke-free products remains critical to sustaining growth and offsetting these structural challenges.
How Does the Zacks Consensus Estimate Compare for MO & PM?
The Zacks Consensus Estimate for Altria’s 2025 and 2026 EPS indicates a year-over-year increase of around 6.3% and 2.3%, respectively. The consensus estimate for MO’s 2025 EPS has inched up 1 cent in the past 30 days to $5.44, while the same for 2026 has slipped 1 cent to $5.56.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Philip Morris for 2025 and 2026 EPS implies year-over-year growth of 14.3% and 11.4%, respectively. The consensus estimate for 2025 EPS has inched up 1 cent in the past 30 days to $7.51, while the same for 2026 has remained unchanged at $8.36.
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MO & PM: A Look at Past-Year Stock Performance
Over the past year, shares of Altria have gained 9.3%, while Philip Morris has delivered a stronger 22.7% advance. Currently, MO trades at $58.69, about 14.4% below its 52-week high. PM, at $156.49, sits roughly 16.2% below its peak.
Image Source: Zacks Investment Research
MO vs. PM: A Peek Into Stock Valuation
Altria is trading at a forward 12-month price-to-earnings (P/E) ratio of 10.57, below its one-year median of 10.81. Meanwhile, Philip Morris’ forward P/E ratio stands at 18.9, also below its median of 20.59.
Image Source: Zacks Investment Research
MO vs. PM: Which Stock Looks More Promising Now?
Among the leading tobacco firms, Philip Morris stands out as the stronger growth story. Its aggressive shift toward smoke-free products, global scale and disciplined cost strategy are driving sustained earnings and margin expansion. Altria, with its U.S.-centric portfolio, continues to deliver dependable cash flows and shareholder returns. For investors focused on long-term growth and industry transformation, PM is better positioned, while Altria offers stability and consistent performance.
Both MO and PM currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.