Earlier today, the Biden administration decided to hold off its plan to ban menthol cigarettes amid concerns over potential political fallout. According to The Wall Street Journal, there are worries that the ban could anger Black voters, as menthol cigarettes are particularly popular among this demographic. Nevertheless, tobacco stocks like British American Tobacco (NYSE:BTI), which produces Newport, and Altria (NYSE:MO), which offers Marlboro menthols in the U.S., saw little change in today’s trading.
This lack of movement might be due to prior reports suggesting that any potential ban could be deferred until after the upcoming November elections.
Furthermore, Health and Human Services Secretary Xavier Becerra pointed out that this decision isn’t politically motivated but is necessary due to the substantial public feedback received. The pause will allow for further discussions before a final decision is made. Interestingly, a 2022 study highlighted that 80% of Black adult smokers prefer menthol cigarettes, which make up about one-third of total U.S. cigarette sales.
What Is the Best Tobacco Company to Invest In?
Of the previously mentioned companies, BTI is the best tobacco stock to invest in, according to analysts. Indeed, Wall Street expects it to increase by almost 28% compared to Altria’s 0.14% rise.
Is BTI the Right Stock to Buy for Passive Income?
Before you hurry to invest in BTI, think about the following:
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