While Brexit is shaking the market again Monday, Altria (MO) is rising, and Stifel thinks that will continue to be the case.Analyst Christopher Growe and his team reiterated a Buy rating and raised their target price on the stock to $71, to reflect their “continued optimism” about Altria’s earnings growth potential, along with its 3.4% yield and the merger between Reynolds (RAI) and Lorillard (LO) which they believe will “enhance the category’s growth and profitability (and Altria’s growth too).” Growe and team write that strong conditions are behind the “robust growth” across Altria’s business, and they believe that the company can continue to gain market share.They also see Altria retaining pricing power, with another seven cent per-pack increase implemented in May.“Pricing at this level should comfortably support mid-single digit operating profit growth for its business.” More detail from the note: In addition, Altria is heavily focused on the future with continued investment behind its E-Vapor business and the future launch of iQOS in the U.S., Philip Morris International’s heat-not-burn product that could continue to support differentiated growth for Altria in relation to its peers.

From a position of strength, the company recently announced a $300 million cost reduction program (a level equivalent to the synergies created by the combination of Reynolds and Lorillard) that is allowing the company not only the confidence in achieving its long-term growth goals through 2017, but also allowing it to reinvest more heavily into the business (E-Vapor and iQOS in particular).The balance sheet remains in fine shape at just 1.4x net debt/EBITDA with roughly $1.5 billion per year in free cash flow generation after dividends.The soon-to-be combination of AB Inbev and SAB Miller reflects a windfall for the company as this investment now stands near $30 billion in value and is capable of accelerating Altria’s earnings growth over the next few years.Altria is up 0.3% to $67.25 in recent trading.Latest In Stockstowatchtoday BlogSo, what’s iQOS really like?Just prior to Christmas I spent an interesting week with an iQOS.I acquired one shortly after the London launch and decided to give it a fair try.

I packed away my usual assortment of vape and snus and went pure HEETS (the tobacco-vape-sticks) for the duration.In the intervening weeks, it’s become clear the full scale of PMI’s ambitions.vape store bridgewater njJust days ago they launched a new website, confidently introducing a radically changed and humanized corporate image.best rated herbal vaporizer penThis PMI is “Designing a smoke-free future”; preparing itself to be the company that spearheads the post-cigarette world.vapor store jacksonville flWhatever your feelings are about the tobacco industry, it’s an extraordinary statement of intent for what is still the world’s largest cigarette seller (until the BAT/Reynolds merger completes, that is).ios packet capture

I presume the public health community to be in meltdown, grappling with whether to take PMI at their word or to dismiss it as more corporate malfeasance from their biggest enemy.This particular nicotine product is, of course, a tobacco product.iqos wienBy which I mean, very simply, it’s made from actual tobacco (how’s that for a definition, FDA?).iqos belarusThis is all going to be very, very interesting….Forgive my preamble but that’s the stuff which interests me most.If you want epic unboxing and technical nerdage, that’s going to be happening real soon, I guarantee.But I’ve spent time with the product and so will tell you how I found it: Let’s start with what it’s like once the thing’s in your mouth and it’s “Smaping” (oh dear, did I do it again?).Sensation: The inhale has a good amount of “impact”.

There’s a slight catch on the throat but nothing particularly unpleasant; noticeable but ephemeral.The tobacco vapor is not overwhelming and doesn’t seem to leave a taste in your mouth.Visuals: In terms of a visual cloud, it’s approximately what you’d expect from a standard cigalike e-cig.It’s not too small to be unsatisfying, but the volume is very reduced compared with smoking and dissipates very quickly.Smell: There is a smell.It’s tobacco, but not tobacco smoke.A light, toasted aroma that is a magnitude less penetrative than cigarette smoke.I smaped in bars; no-one complained.Taken together, the smell and lessened smoke/vape output lends iQOS towards stealthy usage.Effects: It is, phenomenologically, very, very similar to smoking.It feels like smoking.I have not had a cigarette for 7 years, but I was transported back to the psychophysical effects of tobacco smoking: a very particular lightheadedness that I think I’d always assumed was related to CO, but could just as plausibly be related to the smorgasbord of active alkaloids contained within real tobacco.

It was very surprising to get this effect from iQOS.I’m not quite sure, even now, how I feel about it: It was not unpleasant, it was familiar, but was not pleasant.For a long-term vaper, slightly odd and disquieting, but not bad.Satisfaction: I found iQOS did the job well enough.I was able to substitute my typical nicotine behaviours (snus and vaping) with the device, and by using around 10-15 HEETS per day.I didnt’ like it as much as vaping because, well, it’s not vaping: flavor, vapor volume, impact: imo, vaping does it better, but then maybe iQOS is better for smokers.I can’t judge this because it’s been so long since I was a smoker.Effects on health: I found no “lung-burden” at all from iQOS.I can remember the days of smoking – in particular the time where I was rebounding between smoking and not smoking; I’d wake up the following day from a ciggie binge and have a real sense of discomfort in my lungs.I didn’t find this at all from iQOS and there’s no perceptible difference using iQOS and vaping in this regard.

Please note, however, that I’m not making any claims over the safety of iQOS.I have no read on this aspect whatsoever at this time.Visible signs of tar: The filter tip from a used HEET does have a slight yellowing after use, but it is nothing compared to smoking.I’d like to see a “smoke-spit test” comparison between the two (cue: 3, 2 , 1: youtube!)I almost fee a bit bad about saying this, but iQOS is a bit of a disaster from a product design standpoint.There are numerous pain points and the additive effect is towards a product that could not be more dissimilar from the smoking ritual if it tried.Yes, smoking is a ball-ache.You need a lighter, you stink, you need to be somewhere you’re allowed to smoke, you need an ashtray.That’s the burden of smoking.A product which supersedes smoking should obviously remove the social stigma, but it should also be as satisfying and easy to use as a cigarette – retaining the ritual, without all the downside.And this is where things get a bit bad for iQOS….

Firstly, if you’re going to be an iQOSer, you need to get used to carrying around quite a bit of kit.You’ll need your HEETS (the cigarette pack), your iQOS (the charging case) and, if you’re traveling anywhere, the cleaning kit and a charger (microUSB).Oh, yes, a cleaning kit!– iQOS is more like running a tobacco pipe than smoking cigarettes; it requires a commitment to maintenance and ships with a little cleaner nubbin that you’ll need to use every three or four days to remove the tobacco-ey deposits left inside your iQOS.I imagine most people won’t bother – they’ll just smape an increasingly horrible iQOS until such a point as it becomes overwhelmingly horrid, at which point they begrudgingly pull out the nubbin and scrub.In vape terms, then, it will become that perennial question: “when should I replace my coil?” (er, when it becomes horrible!).I don’t know what the solution to this looks like, but if I were an iQOS engineer it would be my number one priority.Since it doesn’t burn, what goes in is what comes out (albeit a bit singed).

You need to put the iQOS back into the charger for a couple of minutes between each go.It does become quite irritating, especially if you want to chain vape.Gets stuck on your lip and pulls the HEET out while you’re smaping, ejecting tobacco from the stick inside the device and all over you.I think the battery might be a little small.If you’re a serious iQOSer you may well vape more per day than the charging case can cope with.So, when all’s said and done, will iQOS be a success?Yes, it will be a success – but success is a relative term.For me, success means major reductions in the number of people smoking, for PMI success means making money while being seen to commit to their new corporate mantras.There’s no doubt in my mind that the PMI version of success will occur (see my first iQOS post for the math on this).Will it reduce the number of smokers significantly?No-one can say, but PMI are claiming to have converted more than a million people globally already.What’s clear though is that Heat not Burn is a technology whose time has come.

The tobacco industry has made many false starts on HnB products but the stars seem to be aligning this time and PMI are staking everything on its success.They have the resources to make it so and are building out prodigious distribution, and distribution is everything.Also, they have long time-frames to play with, so the problems with the current version won’t be an issue as they develop the technology over time.But, why do smokers need iQOS if vaping is so good?Vaping has made inroads into smoking internationally – albeit more so in supportive countries such as the UK and France than in others.This, I would contend, is behind much of the confidence being exhibited by PMI: the demand for risk-reduced products is now proven.The question is, which risk-reduced products will win?In my view, vaping has gotten stuck for some time.The model of Chinese-made hardware and domestically-produced eliquid has served the industry participants well and served many vapers very well too, but the breakthrough products still aren’t available (although, XOLO 😉 ).

There are, of course, other problems relating to misinformation from government bodies and health organizations who are confusing smokers with conflicting information.On safety: Should smokers use iQOS?I have no idea whatsoever about the safety of iQOS versus vaping.There is, however, a curious dynamic afoot.It’s been roundly agreed that vaping products are far less risky than smoking.The Royal College of Physicians estimates vaping to be less than 5% as harmful as smoking.PMI, on the other hand, seem to be anchoring iQOS at 10% the risk of smoking.I find this all rather intriguing.No-one seems to have picked up on this, but 5% and 10% are dramatically different concepts: 10%, in this context, is NOT twice the harm of 5%….let me explain: I was struck, at the first E-Cigarette Summit, that those scientists present, when asked, stated that they would anticipate vaping to be 1/20th (i.e.5%) of the risk of smoking.Some commentators later criticized (fairly) this as a false reification, pointing out that a product that is 5% as harmful as smoking is still a very harmful product, and that this isn’t sensible politics.

But there’s something interesting about the 5% value: it’s clearly not an actual estimation of risk.5% is a statistical convention; it’s the significance threshold by which a significant “result” is judged.in other words, If vaping creates < 5% the risk of smoking, we will never be able to untangle its health burden from the burdens caused by smoking (and a host of other behaviors).In this context, 5% means: “fundamentally harmless”.10% the harm of smoking, on the other hand, is something quite different.If a product is 10% the harm of smoking, we will be able to observe the harm it creates in the population over time, and that harm will be directly attributable to that product.The irony is, that the best current medical science cannot realistically predict the precise harms from iQOS.For the health conscious smoker this represents a bit of a dilemma.Ultimately, if iQOS is a 10th the danger of smoking, a smoker should clearly at least use iQOS instead of smoking, and they should start now.