Turning point marks (NYSE: TPB) fell 15.5% this week, according to data from S&P Global Market Intelligence. The company with brands of tobacco rolling papers, chewing tobacco and the fast-growing nicotine pouch category was hit due to reports of a slowdown in approvals of nicotine pouches by the Food and Drug Administration (FDA).
Here’s why the stock fell this week and whether it belongs in your portfolio right now.
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Cigarette smoking is declining in the United States, but is being replaced by nicotine pouches. These tobacco-free pouches offer a cleaner feel than chewing tobacco, making them more accessible for everyday life and popular with a broader customer base.
Turning Point Brands stock had soared on the back of its fast-growing nicotine pouch brands, led by fre cans. The segment’s revenue grew 266% year over year last quarter to $41.3 million, representing 34% of the company’s total revenue. Guidance calls for net revenue of between $180 million and $190 million for the category in 2026.
This week, reports have emerged that the FDA is hesitant to license new bags in the United States due to unknown health impacts and their use among younger children. It could be a scare similar to the vaping epidemic about a decade ago.
After reporting disappointing earnings, Turning Point Brands stock is down 50% from its highs and continues to fall. The stock has a market capitalization of $1.3 billion, which could be cheap, given steady revenue from rolling papers, chewing tobacco and nicotine pouches.
If you think this FDA report is just a small bump in the road, Turning Point Brands could be a good stock to buy in your portfolio today.
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