Philip Morris International Inc. (PM), headquartered in Stamford, Connecticut, is renowned as an international tobacco company actively delivering a smoke-free future and evolving its portfolio to include products outside of tobacco and nicotine. Valued at $195.4 billion by market cap, the company’s current product portfolio primarily consists of cigarettes and smoke-free products.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and PM fits right into that category, signifying its substantial size, stability, and dominance in the tobacco industry. Its strong brand equity, especially with Marlboro, provides the company with significant pricing power and a competitive advantage in the industry.
The acquisition of Swedish Match enhances its portfolio by adding ZYN nicotine pouches, aligning with consumer trends toward smoke-free alternatives. Its strategic diversification into wellness and healthcare through the acquisition of Vectura mitigates tobacco-related risks while opening new revenue streams in the expanding healthcare sector, particularly in inhaled therapeutics.
The Marlboro seller touched its 52-week high of $127.41 in the last trading session. PM stock is up 22% over the past three months, outperforming the S&P 500 Index’s ($SPX) 4.3% gain during the same time frame.
In the long term, PM shares rose 32.3% over the past year, and in 2024, the stock is up 34.6%. By contrast, the SPX is up 15.7% on a YTD basis and 22.2% over the past 52 weeks.
To confirm the bullish price trend, PM has been trading above both its 50-day and 200-day moving averages since mid-April.
Despite the declining cigarette volumes in the U.S., Philip Morris International enjoys robust demand in international markets due to population growth and cultural acceptance of smoking. PM has also successfully transitioned into the smoke-free market with products like Zyn nicotine pouches and iQOS devices. Furthermore, the upcoming U.S. launch of iQOS and growth opportunities in new markets position PM for continued revenue increases, contributing to its positive market momentum.
On July 23, Philip Morris released its Q2 earnings report, resulting in a 2.2% increase in its stock price, fueled by market optimism surrounding its revised earnings guidance for the full year.
Philip Morris’ rival, Altria Group, Inc. (MO), has slightly outperformed PM in 2024, with 35.6% gains. However, PM’s returns over the past 52 weeks outpace MO’s 24% gains.
With its recent outperformance compared to the broader SPX, analysts remain cautiously optimistic about PM’s prospects. The stock has a consensus rating of “Moderate Buy” from the 13 analysts covering it, but it currently trades over its mean price target of $116.18.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
