Reporting for The Wall Street Journal’s business section, Carol Ryan wrote that tobacco companies with growing smoke-free product portfolios are increasingly attracting investors, helping to narrow the stigma traditionally associated with cigarette stocks.
“The taboo against owning cigarette stocks hasn’t gone away, but new gray areas are emerging,” she wrote. “Companies that make a big share of their sales from smoke-free products like vapes appear to be rejoining polite society, and are getting a boost to their stock-market valuations as a result.”
Ryan said shares of British American Tobacco have roughly doubled over the past two years, outperforming many major technology stocks, as investors respond to a more favorable U.S. regulatory environment under the Trump administration and recent FDA guidance allowing new vapes and nicotine pouches to remain on the market while their premarket applications are under review. She said the policy could help legal manufacturers compete more effectively against the illicit vape market, which Jefferies Financial Group estimates accounts for more than two-thirds of U.S. vape sales.
Ryan said the shift toward smoke-free products is also improving tobacco companies’ market valuations. Philip Morris International, which generated 41% of 2025 sales from non-combustible products, trades at a significant valuation premium to peers, while BAT —whose smoke-free portfolio represented nearly 20% of revenue last year — is targeting 50% by 2035. She said BAT has gained U.S. market share with its Velo Plus nicotine pouches and could benefit from the FDA’s new approach as it launches updated Vuse products. Ryan concluded that, as traditional cigarette volumes continue to decline and other consumer staples sectors struggle with weak growth, a broader group of investors is beginning to reconsider tobacco stocks, particularly companies demonstrating growth in reduced-risk nicotine products.
