Altria ( NYSE:MO ) just wrapped up a strong 2024, but the road ahead looks bumpy. The tobacco giant delivered an adjusted EPS of $5.12, up 3.4% for the year, but 2025 projections of $5.22 to $5.37 suggest slower growth, with a midpoint below Wall Street's estimates. Cigarette volumes keep slidingdown 8.8% in Q4as more smokers switch to vapes and cheaper brands. Meanwhile, regulators are circling, with a proposed cap on nicotine levels in cigarettes and a looming import ban on NJOY devices due to a patent dispute with Juul Labs. If the trade ruling stands, NJOY could be locked out of the U.S. market by March 31, dealing a blow to Altria's smoke-free ambitions.

Still, the company isn't backing down. It just wrapped up a massive $3.4 billion share buyback and is teeing up another $1 billion in repurchases through 2025. Dividends? $6.8 billion paid out last year. But NJOY, once seen as a bright spot, is now a wildcard. Illicit disposable vapes dominate over 60% of the market, making it an uphill battle for legal alternatives. Altria admits this shifting landscape could force a rethink of its 2028 smoke-free targets. The big question: Can NJOY pivot fast enough to stay competitive, or will regulatory delays and black-market competition stall its growth?

For investors, Altria is still a cash machine, but its long-term playbook is getting complicated. The company expects to spend up to $225 million in capital expenditures this year, balancing traditional tobacco margins with investments in reduced-risk products. It's also banking on mid-single-digit EPS growth through 2028but that hinges on adapting to an unpredictable regulatory and competitive environment. With cigarette sales falling, vape market uncertainty rising, and regulators tightening the screws, Altria's next moves could define whether it stays a dividend powerhouse or faces a drawn-out fight for relevance.

This article first appeared on GuruFocus .