Bank of America lifts tobacco estimates after regulatory wins

Investing.com -- Bank of America raised earnings estimates for Altria Group and Philip Morris International following regulatory developments in the second quarter that benefited the tobacco sector.

US tobacco stocks gained 9.3% in the second quarter, trailing the S&P 500's 14.9% advance but outperforming beverages, food, household products and staples sectors. Philip Morris International rose 9.4% while Altria added 9.0%.

The bank cited several catalysts including improved oversight of illicit nicotine products and a more relaxed FDA enforcement policy announced in May that allows certain unauthorized vape and nicotine pouch products to stay on the market during review. Other developments included Philip Morris's CFO transition announcement on May 20, the national launch of ZYN Ultra on June 2, and the FDA's authorization of 20 ZYN variants on June 30.

For Altria, Bank of America raised its second quarter 2026 earnings estimate by $0.01 to $1.48 per share, representing 2.5% growth year-over-year. The bank increased its 2026 and 2027 earnings estimates by $0.01 each to $5.67 and $5.91 per share. Bank of America maintained its $82 price target based on a 13.9x multiple applied to its 2027 earnings estimate.

For Philip Morris International, the bank kept its second quarter earnings estimate at $2.04 per share, including a $0.04 foreign exchange headwind. Bank of America maintained its 2026 earnings estimate at $8.40 but raised its 2027 forecast by $0.02 to $9.15 per share. The bank kept its $209 price target based on a 22.8x multiple applied to its 2027 earnings estimate.

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