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Faham Baig

Research Analyst at UBS Asset Management Americas Inc.

Faham Baig is an Executive Director of Equity Research at UBS Asset Management (UK) Ltd, specializing in consumer staples with a primary focus on the tobacco industry. He has covered major companies such as Altria Group, Philip Morris International, and British American Tobacco, but his analyst track record includes a 22% success rate and an average return of -18.02% based on public performance metrics. Baig began his career as a Research Analyst at Credit Suisse before joining UBS, where he regularly issues ratings and price targets for leading tobacco firms. He holds senior-level equity research credentials, reflecting his ongoing coverage of some of the sector's largest companies.

Faham Baig's questions to ALTRIA GROUP (MO) leadership

Question · Q3 2025

Faham Baig from UBS inquired about the potential financial benefits of duty drawbacks, specifically whether the ~$3 billion in federal excise tax payments represents the scale of the benefit, and if this would be a primary driver for accelerating EPS growth to high single digits to achieve the mid-single-digit EPS CAGR by 2028. He also asked if the FDA's pilot program for nicotine pouches would influence the national launch decision for on! PLUS, and why such acceleration is possible for pouches but not for the larger e-vapor category.

Answer

CEO Billy Gifford cautioned against premature conclusions on the duty drawback's exact financial impact, emphasizing its role in international relationships and production, with drawback as an additional benefit. He reaffirmed Altria's commitment to its previously stated mid-single-digit EPS CAGR goal. Regarding the FDA pilot, Gifford stated Altria's decisions prioritize a functioning regulatory system and long-term company interests. He explained the pilot's focus on nicotine pouches as a more established category for initial learning, hoping its success would lead to broader application across smoke-free platforms, including the more complex e-vapor market.

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Question · Q2 2025

Faham Baig asked whether the crackdown on illicit vapes is having a net positive impact on cigarette volumes. He also inquired about a lower-than-normal Federal Excise Tax (FET) per pack, seeking an explanation for the "drawback" policy and its future implications.

Answer

CEO Billy Gifford stated it is too soon to call the enforcement momentum a trend but noted it is encouraging. He explained that the FET issue relates to a "drawback" policy that disadvantages domestic manufacturers. He asserted that Altria views this as bad policy but will seek partnerships to avoid being at a competitive disadvantage.

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Faham Baig's questions to Philip Morris International (PM) leadership

Question · Q3 2025

Faham Baig from UBS asked about intensifying competitive activity in Japan's heated tobacco market, questioning if IQOS could maintain high single-digit growth despite this. He also inquired about the potential launch of ZYN Ultra in the U.S., asking when the FDA review might conclude, if PMI would consider launching ahead of approval, and if the product corresponds to the 2021 application covering specific strengths and flavors.

Answer

Emmanuel Babeau, Chief Financial Officer, acknowledged intensifying competition in Japan's heated tobacco market but expressed confidence in IQOS's ability to maintain strong leadership and growth, citing its stable 75%+ category share. He welcomed increased industry investment in smoke-free products as beneficial for the category leader. Regarding ZYN Ultra, Babeau stated he would not speculate on FDA review timelines but hoped for a level playing field, confirming PMI is monitoring competitors' actions and considering all options, noting ZYN Ultra products would offer differentiation.

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Question · Q3 2025

Faham Baig from UBS asked about intensifying competitive activity in heated tobacco, particularly in Japan with recent product launches and heavy promotions. He questioned if this would have a limited impact on IQOS, similar to historical trends, and if IQOS could maintain its high single-digit growth in Japan. In a follow-up, he inquired about the potential launch of ZYN Ultra in the U.S., asking about the FDA review timeline, the possibility of launching ahead of approval, and if the product corresponds to the 2021 PMTA application for 6mg/9mg strengths and 10 flavors.

Answer

Emmanuel Babeau, CFO, acknowledged the increased intensity of competition in heated tobacco, viewing it positively for the category's overall growth. He highlighted IQOS's stable 75%+ market share in Japan over the past 5-6 years despite competitive offerings and discounts, expressing confidence in IQOS's continued strong leadership and growth in the market. Regarding ZYN Ultra, he declined to speculate on FDA timelines but emphasized the hope for a level playing field. He confirmed that ZYN Ultra products would offer differentiation from the existing ZYN dry PMTA-authorized products.

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Question · Q2 2025

Faham Baig from UBS asked for an explanation of the narrowing gross margin gap between smoke-free and combustible products in Q2 and for a reminder of the company's foreign exchange hedge rates for the year.

Answer

CFO Emmanuel Babeau explained that the smoke-free gross margin was stable around 70%, and the gap narrowed because combustible margins improved on price and mix. He expects smoke-free margins to remain high in H2, though year-over-year gains will lessen due to tougher comps. He declined to provide specific FX hedge rates, stating it is not a regular disclosure.

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Question · Q1 2025

Faham Baig asked for the ZYN growth rate indicated by MSA data, PMI's perspective on how recent movements at the CTP might impact the timing of the IQOS ILUMA launch in the U.S., and for the company's net interest cost guidance for the year.

Answer

Chief Financial Officer Emmanuel Babeau estimated that MSA data showed ZYN's share growth was close to 30% in March. Regarding the CTP and the IQOS ILUMA launch, he stated that it was too early to comment on any potential impact. On net interest costs, Babeau declined to provide specific full-year guidance but noted that the strong Q1 result was partly due to positive mark-to-market impacts on hedging instruments.

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Faham Baig's questions to British American Tobacco (BTI) leadership

Question · H1 2025

Faham Baig from UBS Group questioned why EBIT guidance was not raised despite two increases to the top-line outlook, asking where incremental investments are being spent. He also requested an update on the divestment process for the ITC hotels stake.

Answer

CFO Soraya Benchikh explained that EBIT guidance was maintained to preserve flexibility for increased investment in new product rollouts like VUSE Ultra, GloHilo, and VeloPlus, which will fuel growth into 2026. CEO Tadeu Marroco reiterated the strategic intent to divest the ITC hotels stake to aid deleveraging but noted the process is subject to bureaucratic steps and approvals in India.

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