Philip Morris International Inc. (PM), with a market cap of $177.5 billion, is a leading tobacco company based in Stamford, Connecticut. PM's product range features cigarettes and smoke-free alternatives like heat-not-burn products, vaporizers, and oral nicotine products, primarily under the IQOS and ZYN brands.
Shares of this tobacco titan have slightly surpassed the broader market over the last year. The stock has gained 18.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 17%. In 2024, PM stock rose nearly 21.4%, while the SPX is up 9.9% on a YTD basis.
Narrowing the focus, PM outperformed in comparison to the iShares US Consumer Staples ETF (IYK). The exchange-traded fund has gained 1.9% over the past year, significantly lagging PM’s performance. Moreover, the stock’s double-digit gains in 2024 exceed the ETF's 7.3% returns during the same period.
On Jul. 23, Phillip Morris released its Q2 earnings report, and the stock edged up 2.2%, driven by market optimism about its revised earnings guidance for the full year.
The impressive momentum of its smoke-free business continued, with an outstanding performance in the second quarter, surpassing EPS expectations. For the current year, the company anticipates net revenue growth of 7.5% to 9% on an organic basis and organic operating income growth of 11% to 13%.
However, on June 18, PM stock dropped over 1% after the company halted online sales of its Zyn nicotine pouches on its U.S. website. This move follows a subpoena received by its affiliate, Swedish Match North America, from the D.C. Attorney General concerning compliance with the city's ban on flavored nicotine products.
For the current fiscal year, ending in December, analysts expect Phillip Morris to report an EPS growth of 7.3% to $6.45 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing forecasts on one occasion.
Among the 13 analysts covering PM stock, the consensus rating is a “Moderate Buy.” That’s derived from eight “Strong Buy” ratings, four “Holds,” and one “Strong Sell.”
This configuration has remained relatively stable over the past few months.
On Jul. 25, Deutsche Bank Aktiengesellschaft (DB) analyst Gerry Galagher maintained Philip Morris with a “Buy” rating and raised the price target from $116 to $118.
While the stock currently trades at a premium to its mean price target of $113.18, the Street-high price target of $126 suggests an upside potential of 10.3%.
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.
