Inflation concerns were cited as a primary reason for the downgrade, which sent the stock down more than 6% as of 10:45 a.m. ET.

“Smokers skew toward low-income consumers, who are disproportionately impacted by rising gas and food prices,” analyst Pamela Kaufman wrote in a note. “We anticipate greater pressures from rising gas prices and weaker consumer sentiment, which should weigh on cigarette volumes and enhance trade down risk.”

Morgan Stanley believes there is an inverse relationship between gas prices and cigarette sales—and gas prices on Wednesday were averaging $4.95 nationwide, according to AAA.

Philip Morris International’s acquisition of Swedish Match was also cited as a competitive threat.

The stress of the COVID pandemic was widely seen by analysts as the primary reason for a major comeback year for cigarettes in 2020, the first increase in cigarette sales in two decades. The Federal Trade Commission’s annual Cigarette Report found 203.7 billion cigarettes sold in 2020, a 0.4% increase from 202.9 billion in 2019.

Revenues have been steadily rising at Altria since 2018, but profitability has suffered. In 2020, the company recorded a $1.2 billion loss after writing down the value of its stake in vaping giant Juul.

Altria valued its Juul stake at $4.2 billion at the end of 2019, after paying $12.8 billion in Dec. 2018.

Altria is the parent of tobacco giant Philip Morris USA, but it also owns wine company Ste. Michelle Wine Estates, which includes wineries Columbia Crest and Chateau Ste. Michelle.