Sep. 10 at 5:26 AM
$UVV — The setup is getting interesting 🌱📈
Q1 was ugly: revenue -12% YoY, tobacco operating income -90%, EPS -
$0.20.
But the problem is mainly tobacco oversupply, not collapsing demand.
FY2026 production surged:
• Flue-cured ex-China +28%
• Burley +54%
Now FY2027 production is projected to fall:
• Flue-cured ~3%
• Burley ~16%
Even more interesting: UVV’s uncommitted tobacco inventory fell from ~27% to ~24%. Management targets ≤20%.
If we see inventory ↓, customer commitments ↑, shipments ↑ and tobacco margins recover, today’s depressed earnings could prove to be the trough.
Management expects tobacco shipments to be heavily weighted toward H2 FY2027.
Add a substantial dividend while we wait.
I’m not betting on more smokers.
I’m betting on the tobacco supply cycle normalizing.
The key question: Was Q1 the bottom?
NFA.
$MO $PM $BTI
