Tobacco

Altria rips off patch slowly with $4.5 bln charge

31 Oct 2019

The tobacco company thinks vaping affiliate Juul is worth one-third less than it paid. It’s counting on slower sales and temporarily lower profitability as regulators weigh limits on e-cigarettes, and localities ban them. Investors are baking in more pessimistic projections.

What’s Philip Morris International worth?

23 Oct 2019

The cigarette giant’s heat-not-burn tobacco device just went on sale in the United States. Based on the current cigarette unit’s valuation and growth assumptions for the heated products, investors could be set for more than 20% upside.

Smokeless tobacco yet to set Philip Morris alight

23 Oct 2019

The Marlboro maker’s heat-not-burn device just went on sale in the United States. The timing is brave given the backlash engulfing rival Juul. But if PMI can convert smokers without inflaming regulators, the $126 bln company could be worth substantially more than today.

Imperial Brands hunts for new boss at a bad time

3 Oct 2019

CEO Alison Cooper is on the way out. The 17 bln pound company is shifting its focus to vapes rather than tobacco while facing regulatory scrutiny about how deadly the former are. Selling bits of the business in tricky markets is another challenge. The job will be a hard sell.

Vaping blowback leaves Imperial short of puff

26 Sep 2019

A crackdown by U.S. regulators has choked growth at the UK tobacco group’s e-cigarette unit. Imperial shunned the big bets made by rivals like Altria, and expects demand will return. But $2.3 bln of lost market value suggests investors’ hopes have vanished in a cloud of steam.

Altria-PMI deal could waft back into view

25 Sep 2019

A $187 bln merger between the cigarette companies was stubbed out by turmoil at Juul, in which Altria owns 35%. The market already suggests the vaping upstart is worth less than Altria paid. If it falls more, the logic of a combination could bring PMI back for another pull.

Altria may have missed chance for merger of equals

27 Aug 2019

The tobacco giant is talking to Philip Morris, the international arm it spun off in 2008, about reuniting – a combo worth more than $200 billion. Both see their future in e-cigarettes. But Altria’s market cap was closer to equal last year. The ideal moment may have passed.

Cigs show challenge of putting stakeholders first

22 Aug 2019

Tobacco companies that were run for customers rather than shareholders would aim to reduce sales of their noxious products. But less scrupulous rivals can undermine solitary socially conscious CEOs. Without collusion or new laws, corporate virtue-talk is mostly a smokescreen.

Investors can give Imperial Brands a bit more time

20 Aug 2019

Some shareholders are gagging for cash from more asset sales. They’re rightly angry about the tobacco firm’s share price collapse. But striking good deals for cancer sticks might be tricky. Beleaguered management would do better to focus on rolling out less harmful products.

San Francisco vaping ban shows warped agenda

28 Jun 2019

Juul Labs’ home is the first U.S. city to block its sales. Local agencies can’t use facial-recognition software. Meanwhile the area has a property-crime problem and human feces on its streets. The place boasting the highest density of billionaires is neglecting basic services.

Private equity could choke on Imperial cigar sale

8 May 2019

Imperial Brands could raise 1 bln pounds from a unit that makes premium stogies. Its rapid growth means a buyout group could earn decent returns at that price. Yet concerns over cancer could irk their investors, and complicate an exit. A Chinese peer may be a more logical owner.

China cigarette IPO offers unfiltered Beijing bet

4 Feb 2019

The overseas arm of China Tobacco will list in Hong Kong. Sales abroad are growing. But most of its revenue comes from importing leaves for its parent, a monopoly in a country where 300 million people light up. That's a lot of risky exposure to dated anti-smoking policies.

Altria’s $12.8 bln vaping punt tastes funky

20 Dec 2018

The Marlboro maker is paying a whopping multiple for 35 pct of Juul Labs - and cutting jobs and up to $600 mln of expenses just to cover interest costs. Meanwhile Juul is handing much of the cash to current owners and staff. It’s a risky bet that rapid growth won’t start to drag.

Cannabis starts to copy tech’s Indian rope trick

7 Dec 2018

Marlboro maker Altria is spending $1.8 billion – more than a 40 percent premium – for a 45 percent stake in pot grower Cronos. The valuation is both high and irrelevant. Cannabis is beginning to adopt Silicon Valley’s belief that the winner is whoever has the most cash.

Big Weed is better off without Big Tobacco embrace

3 Dec 2018

Altria can easily afford to swallow $2 bln pot producer Cronos. It’s the seller – and its peers – that could pay a high price. Companies want the product to be seen as medicinal not lethal, edible not smokable, and more like beer than tobacco. Not all capital infusions are equal.

Altria could polish cut-price Juul

29 Nov 2018

The $100 billion Marlboro maker may be eyeing a stake in the vaping unicorn as e-cigarettes cut into its growth. Buying upstarts can be expensive for mature companies threatened with disruption. But Juul now has regulators on its back. That could help Altria strike a bargain.

Perrigo’s new CEO is a strategic smoke signal

9 Oct 2018

An ill-timed expansion left the Irish firm struggling with a tough market for generic drugs. Now it has hired a new chief who formerly ran cigarette companies, breaking a pharma-sector taboo. That’s an emphatic statement that its future lies in consumer goods.

Retailer Next confronts last corporate taboo

14 Sep 2017

The UK clothes chain has sketched out a scenario where high-street store sales keep shrinking until they can’t cover their cash costs. Even in that dismal situation, Next would be worth only a third less than now. Few companies consider their own demise in this way; more should.

FDA crackdown on cigarettes a rare win for science

28 Jul 2017

The U.S. watchdog wants to lower nicotine levels in a hit to Big Tobacco, whose shares plunged. The agency says long-term use kills half of smokers. It’s a departure from Team Trump’s rejection of facts in climate change. The FDA is the odd regulator defying corporate interests.

Japan Tobacco drags itself into final frontiers

13 Jul 2017

The maker of Camel has a shrinking share of its home market. A mooted purchase of Philippine assets from troubled Mighty for $890 mln will give Japan Tobacco a lift in a nation where people are still lighting up. But it also underscores the firm's existential growth challenges.