(Bloomberg) -- Altria Group Inc. values e-cigarette maker Juul Labs Inc. at about $4.5 billion -- less than half of Juul’s own valuation.

Altria Chief Executive Officer Billy Gifford told analysts on an earnings conference call Friday why the cigarette maker ended up cutting the value of its Juul investment once again.

“We came forward with our best estimate,” Gifford said, responding to a question about the gap between the two company’s estimates. Gifford said the number is based on projections for Juul’s future cash flow, the size of the industry and regulatory hurdles it faces.

Gifford predicted a “two- to three-year transition at all manufacturers” of vaping products as the U.S. Food and Drug Administration evaluates the category. He also noted that competition is heating up.

In a recent memo, Juul cut its own valuation to about $10 billion -- an admission that the vaping company once considered a Silicon Valley darling sees more obstacles ahead. Altria owns a 35% stake in Juul.

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