Latest news with #GarrettNelson
Yahoo
6 days ago
- Business
- Yahoo
US Zyn boom pushed Philip Morris stock to a record. Wall Street still sees 'impressive growth' ahead.
Philip Morris International (PM) is riding the wave of smoke-free nicotine products with Zyn. The category has grown so much that convenience stores like Casey's (CASY) and Murphy USA (MUSA) have changed their shelves to cater to consumers looking for tobacco alternatives to satisfy their nicotine fix. "This is a multiyear growth story ... and there's a lot of potential there," CFRA analyst Garrett Nelson said in an interview. Zyn, which produces nicotine pouches without tobacco, was part of Philip Morris' acquisition of Swedish Match in late 2022. Zyn gained so much popularity in the US that it's facing a shortage that started in April 2024. The shortage will be over in the third quarter, the company said. "They are still a market share leader," Needham analyst Gerald Pascarelli said in an interview. "They've been capacity constrained because they were growing so rapidly ... they simply couldn't service the amount of demand." Shipment volumes of the product to the US increased from 132 million cans in Q1 2024 to 202 million in Q1 2025. Earlier this year, the FDA approved authorization to market 20 pouches per can under regulations that, among other things, would ensure that ads are targeted to adults ages 21 and older. Currently, nicotine merchants can sell 15 per can, with each individual pouch weighing 0.4 grams. (The total weight of the can is 6 grams.) Philip Morris' smoke-free business also includes heated tobacco products like IQOS and e-vapor products like Veev. In the most recent first quarter, it accounted for 42% of total net revenue. On June 13, Philip Morris International stock hit an all-time high record close of $184.33. Shares are up nearly 80% from a year ago. That's far more than what Nelson calls its "closest" competitor, Altria (MO), up more than 30%, which produces the brand called On! Nicotine Pouches. In the same period, the S&P 500 (^GSPC) was up roughly 11%. Philip Morris International's net revenue grew 5.8% in the first quarter to $9.3 billion. Smoke-free products like Zyn grew 15% to $3.9 billion; "combustibles," like cigarettes, showed flat growth at $5.4 billion. Gross profit grew 11.8% in the quarter to $6.3 billion overall, with smoke-free products specifically posting a 27.7% surge in gross profit to $2.7 billion. CFO Emmanuel Babeau told investors its gross profit was "fueled by the rapid growth of Zyn." In the US, the shipment volume of oral smoke-free products in pouches or pouch equivalents increased by 27.2%. Outside of the US, nicotine pouch volume also grew by 53% in emerging markets like South Africa and Europe, among others. "Nicotine pouches are relatively lightweight. You can ship a ton," Pascarelli said, adding that they are low-cost to make. The economy — boom, bust, or somewhere in between — won't be an issue, analysts said. "When you have a product that people like and is addictive ... consumers are willing to pay a premium," Nelson said. "Tobacco companies [are] being able to push through price increases very easily." One yellow flag: Is this the next Juul? "There was a ton of people underage that were vaping," Pascarelli said. That drew scrutiny from regulators because the products were flavored, which attracted younger users. Zyn uses flavors like wintergreen that are supposedly less ominous. "They're not these novel flavors (like mango) that really took off with the vapers" who skewed younger, he said. Convenience chains are benefiting too. Casey's General Stores CEO Darren Rebelez said he swapped out cigarettes with Zyn, moving them front and center in displays. Growth of the nicotine pouch business has doubled around 200% in the past two years and 54% in the last year alone. "It's growing a lot, and some of that is what our merchants have done to give it more exposure and to reset it ... we've helped to accelerate that," Rebelez said in an interview, adding that the "decline in cigarettes is real" as consumers experiment with other products. Earlier this year, convenience store 7-Eleven president Stan Reynolds told investors the company "made strategic investments" in expanding its tobacco offerings as "53% of adult smokers are looking to switch from cigarettes to noncombustible products." Once 7-Eleven made the switch, Reynolds said it has seen sales increase in the category. It's also making up half the loss in sales from the decline in cigarettes and is benefiting from higher margins. Per Philip Morris International, from 2012 to 2024, its cigarette shipment volume fell from 927 billion units to 617 billion units. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy
Yahoo
6 days ago
- Business
- Yahoo
US Zyn boom pushed Philip Morris stock to a record. Wall Street still sees 'impressive growth' ahead.
Philip Morris International (PM) is riding the wave of smoke-free nicotine products with Zyn. The category has grown so much that convenience stores like Casey's (CASY) and Murphy USA (MUSA) have changed their shelves to cater to consumers looking for tobacco alternatives to satisfy their nicotine fix. "This is a multiyear growth story ... and there's a lot of potential there," CFRA analyst Garrett Nelson said in an interview. Zyn, which produces nicotine pouches without tobacco, was part of Philip Morris' acquisition of Swedish Match in late 2022. Zyn gained so much popularity in the US that it's facing a shortage that started in April 2024. The shortage will be over in the third quarter, the company said. "They are still a market share leader," Needham analyst Gerald Pascarelli said in an interview. "They've been capacity constrained because they were growing so rapidly ... they simply couldn't service the amount of demand." Shipment volumes of the product to the US increased from 132 million cans in Q1 2024 to 202 million in Q1 2025. Earlier this year, the FDA approved authorization to market 20 pouches per can under regulations that, among other things, would ensure that ads are targeted to adults ages 21 and older. Currently, nicotine merchants can sell 15 per can, with each individual pouch weighing 0.4 grams. (The total weight of the can is 6 grams.) Philip Morris' smoke-free business also includes heated tobacco products like IQOS and e-vapor products like Veev. In the most recent first quarter, it accounted for 42% of total net revenue. On June 13, Philip Morris International stock hit an all-time high record close of $184.33. Shares are up nearly 80% from a year ago. That's far more than what Nelson calls its "closest" competitor, Altria (MO), up more than 30%, which produces the brand called On! Nicotine Pouches. In the same period, the S&P 500 (^GSPC) was up roughly 11%. Philip Morris International's net revenue grew 5.8% in the first quarter to $9.3 billion. Smoke-free products like Zyn grew 15% to $3.9 billion; "combustibles," like cigarettes, showed flat growth at $5.4 billion. Gross profit grew 11.8% in the quarter to $6.3 billion overall, with smoke-free products specifically posting a 27.7% surge in gross profit to $2.7 billion. CFO Emmanuel Babeau told investors its gross profit was "fueled by the rapid growth of Zyn." In the US, the shipment volume of oral smoke-free products in pouches or pouch equivalents increased by 27.2%. Outside of the US, nicotine pouch volume also grew by 53% in emerging markets like South Africa and Europe, among others. "Nicotine pouches are relatively lightweight. You can ship a ton," Pascarelli said, adding that they are low-cost to make. The economy — boom, bust, or somewhere in between — won't be an issue, analysts said. "When you have a product that people like and is addictive ... consumers are willing to pay a premium," Nelson said. "Tobacco companies [are] being able to push through price increases very easily." One yellow flag: Is this the next Juul? "There was a ton of people underage that were vaping," Pascarelli said. That drew scrutiny from regulators because the products were flavored, which attracted younger users. Zyn uses flavors like wintergreen that are supposedly less ominous. "They're not these novel flavors (like mango) that really took off with the vapers" who skewed younger, he said. Convenience chains are benefiting too. Casey's General Stores CEO Darren Rebelez said he swapped out cigarettes with Zyn, moving them front and center in displays. Growth of the nicotine pouch business has doubled around 200% in the past two years and 54% in the last year alone. "It's growing a lot, and some of that is what our merchants have done to give it more exposure and to reset it ... we've helped to accelerate that," Rebelez said in an interview, adding that the "decline in cigarettes is real" as consumers experiment with other products. Earlier this year, convenience store 7-Eleven president Stan Reynolds told investors the company "made strategic investments" in expanding its tobacco offerings as "53% of adult smokers are looking to switch from cigarettes to noncombustible products." Once 7-Eleven made the switch, Reynolds said it has seen sales increase in the category. It's also making up half the loss in sales from the decline in cigarettes and is benefiting from higher margins. Per Philip Morris International, from 2012 to 2024, its cigarette shipment volume fell from 927 billion units to 617 billion units. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy Sign in to access your portfolio
Yahoo
12-06-2025
- Automotive
- Yahoo
Tesla's Texas robotaxi launch: Expect it to be 'low-key'
Tesla's (TSLA) robotaxi will tentatively launch in Austin, Texas, on June 22, according to CEO Elon Musk. CFRA analyst Garrett Nelson thinks this launch will be more of a "low-key" event compared to its big "Cybercab" debut last year. IN the video above, you can hear more of Nelson's take on the launch and why he thinks the stock has some near-term headwinds. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. What are you expecting from this robo taxi launch? Yeah, thanks for having me. We think it's going to be a lot more low-key than the robo taxi day that Tesla held in Los Angeles last October, which was on a Hollywood movie set, very different type of production. I think this is going to be much more low-key. October or sorry, June 22nd is a Sunday, which is very unusual to have a major product launch, but I don't think that's a coincidence. So, I think it's, you know, expectations are high coming into this, but I think the key is really what happens in the three to six months following this event. So, initially, it's only going to be maybe a dozen or so model wise with the most recent version of full self-driving installed on them, operating in a geofenced area of Austin with the vehicle being supervised remotely as well. So, I think a lot of people are going to say, well, why is this so special? You know, what is Tesla doing here that Waymo isn't already doing with the robo taxis that they are operating in Austin. And I think people are going to look at the size of the geofenced area. Waymos is 37 square miles. How quickly they can expand that geofenced area, and then how quickly they can increase the number of vehicles on the roads and also then expand to other markets. What is the time framing for that scaling that would lead you to then raise your own rating and expectations on the stock? Well, Elon Musk thinks they can have maybe a thousand or so on the road by the end of this summer. It seems a bit optimistic, but we'll see. Our main concerns with this stock right now are number one valuation, given this really dramatic rebound since their first quarter earnings release in April. The stock is up, you know, about 100 points from when they reported earnings, only six or seven weeks ago. So, it's valuation at north of 110 times our EPS estimate for next year, but also ongoing market share losses across their three major markets of China, Europe, and the US. That has continued. You look at the China data, Tesla sales were down 15% in May. Meanwhile, total EV sales were up 38% in China. So, in Europe and the US, it's kind of a similar story. So, those near-term issues really concern us here. We know we're right around the corner from their second quarter deliveries report, which will happen in about three weeks. I don't think that's going to be a great release. And so there's some major near-term challenges and valuation being an issue for us also. In addition to the Big Beautiful Bill, in which Tesla will be losing their tax credits, not only on EVs, but for energy storage and solar products as well.
Business Insider
28-05-2025
- Automotive
- Business Insider
CFRA Sticks to Their Buy Rating for AutoZone (AZO)
In a report released today, Garrett Nelson from CFRA maintained a Buy rating on AutoZone (AZO – Research Report), with a price target of $4,200.00. The company's shares closed today at $3,695.66. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter According to TipRanks, Nelson is a 3-star analyst with an average return of 1.2% and a 54.01% success rate. Nelson covers the Consumer Cyclical sector, focusing on stocks such as AutoZone, CarMax, and Genuine Parts Company. The word on The Street in general, suggests a Strong Buy analyst consensus rating for AutoZone with a $4,008.05 average price target. AZO market cap is currently $64.01B and has a P/E ratio of 25.66. Based on the recent corporate insider activity of 60 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AZO in relation to earlier this year. Last month, DOMINGO HURTADO, the SVP of AZO sold 4,800.00 shares for a total of $17,568,000.00.
Yahoo
30-04-2025
- Business
- Yahoo
Is Celsius Holdings Stock Going to $30? 1 Wall Street Analyst Thinks So.
The Wall Street pundit made a significant change to his recommendation. In fact, he knocked the beverage stock all the way down to sell from a buy. One analyst tracking the fortunes of Celsius Holdings (NASDAQ: CELH) is no longer enjoying the taste of the stock. He downgraded his recommendation on the natural ingredients energy drink maker, compounding that with a rather drastic price target cut. Is it time for investors to bail from the stock? In an update on the stock published toward the end of April, CFRA's Garrett Nelson changed his Celsius recommendation from "buy" to "sell," bypassing the middle-ground "hold" tag entirely. Accordingly, he made a significant reduction to his price target, from $45 per share all the way down to $30. Based on the new price target, he anticipates a nearly 20% price decline from the stock's current level of about $36. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » According to reports, Nelson feels the stock's rally over the past few months -- after coming under heavy selling pressure before that -- has made its risk/reward profile unappealing. The analyst also expressed concern over the notable decline in short interest recently. In his view, this makes it less vulnerable to a price-boosting short squeeze. As for Celsius' fundamentals, Nelson acknowledged the company's high gross margins and robust balance sheet. Yet, he wrote, there are concerns about organic revenue development, a key reason why he prefers stocks in the beverage sector that are more defensive, have a broader international profile, and pay relatively high dividends. The CFRA prognosticator certainly raises several solid points about Celsius, both positive and negative. I don't share his bearishness about the company, given what I consider to be its above-average fundamentals for a beverage company, and its nimble top management team. Then again, though, it was over-bought during the pandemic's height, and to some degree the market is still trying to figure out a fair price for the stock. Given that, I'd wait some time for that level to settle before deciding if it's truly a bargain. Before you buy stock in Celsius, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Celsius wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $598,818!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $666,416!* Now, it's worth noting Stock Advisor's total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of April 28, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Celsius. The Motley Fool has a disclosure policy. Is Celsius Holdings Stock Going to $30? 1 Wall Street Analyst Thinks So. was originally published by The Motley Fool
