Risk, returns & timeframes illustration
1 min read
October 31, 2022
by
Belinda Nash

Planet of the vapes 🦍

Following last week’s urgent government alert, vapers and retailers may be fuming that e-cigs are being vaporised from shelves. This follows zigzagging revenue returns mist by vape distributors, including Juul being smoked out of the US. But is it all smoke ‘n’ mirrors?
Risk, returns & timeframes illustration
1 min read
October 31, 2022
by
Belinda Nash

Planet of the vapes 🦍

Following last week’s urgent government alert, vapers and retailers may be fuming that e-cigs are being vaporised from shelves. This follows zigzagging revenue returns mist by vape distributors, including Juul being smoked out of the US. But is it all smoke ‘n’ mirrors?
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Vape fans are sucking up the news that some of their nicotine products are being vaporised from shelves following last week’s urgent government alert. And as e-cigarette chats spark up - including a Matariki #epicfail by Chinese-owned Relx (RLX) - in the US, officials have labelled youth vaping an ‘epidemic’. Even ‘cultural phenomenon’ Juul had their US market share blow up in their face. First, a 2020 TikTok teen backlash, now an FDA US ban on all Juul products due to their ‘disproportionate’ influence on youth vaping. 😤

Was Juul shareholder Altria (MO) left fuming? The Marlboro maker, whose mantra is ‘moving beyond smoking’, has seen a five-year 28% decline in their share price, and last week missed earnings estimates. But pointing to the company’s 13% shareholder return over the past year, some analysts hint of ‘business momentum’. Could Altria’s new partnership with Japan Tobacco to create smoke-free products fire up the company? 🚭

But where there’s smoke, there may yet be, erm, mist? An October report projects that the global vape and e-nicotine market may reach US$55.99 billion value by 2026, more than double over five years, from US$19.92 billion in 2021. But has this news mist Zig-Zag maker Turning Point Brands (TPB) shareholders? While the vape distributor of products with names like Tequila Sunrise beat analysts’ earnings expectations last week, they’re still down 45% from their 52 week November 2021 high of $42.62. 

Vapes’ future forecast may have also blown past vape products distributors British American Tobacco (BTI) and Philip Morris International (PM). They’ve both been smoked over the past five years, down 39% and nearly 13% respectively, reportedly due to decreasing popularity of tobacco, and vape margins squeezed by high inflation and supply chain issues. We say zig, you say zag. 🔀

Belinda Nash
Finance writer
Linkedin

We’re not financial advisors and Hatch news is for your information only. However dazzling our writing, none of it is a recommendation to invest in any of the companies or funds mentioned. If you want support before making any investment decisions, consider seeking financial advice from a licensed provider. We’ve done our best to ensure all information is current when we pushed ‘publish’ on this article. And of course, with investing, your money isn’t guaranteed to grow and there’s always a risk you might lose money.

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