Cigarette Stocks Just Collapsed After This Happened

Shares of top cigarette stocks like Altria and British American Tobacco were headed lower on Tuesday after Nielsen data released some discouraging results.

According to Nielsen data, cigarette volumes fell 11.2% in the four-week period ended May 18th.

The data revealed that sales volume, defined by the number of packs of cigarettes sold, fell 11.2% in the four-week period ended May 18.

Total sales declined 6.9% to $59.27 billion and have now dropped for 18 consecutive months, according to Cowen analyst Vivien Azer.

“That headline number of an 11% decline is very uncomfortable,” Azer remarked. According to the analyst, Nielsen’s numbers tend to be overstated.

Not too long ago, Altria said it was going to invest $12.8 billion for a 35% in the clear market leader Juul. Volume for the e-cigarettes category surged 46.4% in the most recent period, according to Nielsen data.

Juul captured 74.5% of sales at stores tracked by Nielsen. Altria has estimated that Juul’s market share at more than 40%.

“For every pack of Marlboro that converts to Juul pods, Altria loses 100% of Marlboro and gains 35% of the Juul pod,” Azer said. “There’s no way the math is possible for that to be a perfect offset.”

Disclaimer: We have no position in any of the companies listed and have not been compensated for this article.