Altria Group, Inc. MO is seeing nicotine pouches take a much larger role in the U.S. oral tobacco market as the category continues to shift toward this format. In the second quarter of 2026, the overall nicotine pouch category accounted for 59.9% of the oral tobacco category, up 8.1 percentage points year over year and 1.8 points sequentially. Total oral industry volume was estimated to have increased 6% in the first half, primarily driven by oral nicotine pouch growth.
Within this expanding category, Altria’s on! brand improved its position during the quarter. Its share of the total oral tobacco category reached 8.6%, up 0.3 percentage points year over year and 0.8 points sequentially. MO’s share of the nicotine pouch category was 14.4%, down 1.7 points year over year but up 1 point sequentially.
Shipment trends were mixed. on! reported second-quarter volume of 49.9 million cans, down 4.2% from a year earlier due to trade inventory movements. First-half volume, however, rose 5.1% to 96.1 million cans as on! PLUS expanded nationally. Estimated retail takeaway volume increased to 47.2 million cans in the second quarter from 40.8 million in the first quarter.
At the same time, the expansion has come with higher investment. on! PLUS reached 120,000 stores nationwide, supported by introductory trial offers and broader promotional activity. These efforts reflect Altria’s ongoing push to strengthen the brand’s presence as nicotine pouches continue to account for a larger share of the oral tobacco category.
MO Faces Competition in the Growing Nicotine Pouch Market
Philip Morris International Inc. PM is also active in the expanding U.S. nicotine pouch category through ZYN. In the second quarter of 2026, Philip Morris reported ZYN U.S. shipments of 2.9 billion pouches, up 1.8% year over year, while ZYN retained around 57% retail value share. Philip Morris also broadened the portfolio with ZYN ULTRA and additional strength and flavor variants.
Turning Point Brands, Inc. TPB is also benefiting from the shift toward nicotine pouches through its Modern Oral portfolio. With Modern Oral reaching 48% of Turning Point Brands’ net sales, the category reported $68.4 million in second-quarter 2026, up 128% year over year. Turning Point Brands is also investing in retail distribution, sales capabilities and brand building for FRE and ALP.
Altria’s Price Performance, Valuation & Estimates
Shares of Altria have gained 6.5% in the past six months compared with the industry’s growth of 8.6%.
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From a valuation standpoint, MO trades at a forward price-to-earnings ratio of 11.82X, down from the industry’s average of 15.05X.
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The Zacks Consensus Estimate for MO’s 2026 and 2027 earnings implies year-over-year growth of 4.6% and 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).