Philip Morris International (PM)
Market Price (4/3/2026): $158.0 | Market Cap: $245.8 BilSector: Consumer Staples | Industry: Tobacco
Philip Morris International (PM)
Market Price (4/3/2026): $158.0Market Cap: $245.8 BilSector: Consumer StaplesIndustry: Tobacco
Investment Highlights Why It Matters Detailed financial logic regarding cash flow yields vs trend-riding momentum.
Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 8.1%, Dividend Yield is 3.5%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 3.9% Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 37% Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 30%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 26%, CFO LTM is 12 Bil, FCF LTM is 11 Bil Low stock price volatilityVol 12M is 26% Megatrend and thematic driversMegatrends include Consumer Lifestyle Transformation. Themes include Tobacco Harm Reduction, Next-Generation Nicotine Products, Smoke-Free Product Innovation, Show more. | Expensive valuation multiplesP/SPrice/Sales ratio is 6.1x Key risksPM key risks include [1] targeted regulatory and legal challenges against its core smoke-free products like IQOS and Zyn, Show more. |
| Attractive yieldTotal YieldTotal Yield = Earnings Yield + Dividend Yield, Earnings Yield = Net Income / Market Cap Dividend Yield = Total Dividends / Market Cap is 8.1%, Dividend Yield is 3.5%, ERPEquity Risk Premium (ERP) = Total Yield - Risk Free Rate, Reflects the premium above risk free assets offered by the investment. is 3.9% |
| Attractive operating marginsOp Mgn LTMOperating Margin = Operating Income / Revenue Reflects profitability before taxes and before impact of capital structure (interest payments). is 37% |
| Attractive cash flow generationCFO/Rev LTMCash Flow from Operations / Revenue (Sales), Last Twelve Months (LTM) is 30%, FCF/Rev LTMFree Cash Flow / Revenue (Sales), Last Twelve Months (LTM) is 26%, CFO LTM is 12 Bil, FCF LTM is 11 Bil |
| Low stock price volatilityVol 12M is 26% |
| Megatrend and thematic driversMegatrends include Consumer Lifestyle Transformation. Themes include Tobacco Harm Reduction, Next-Generation Nicotine Products, Smoke-Free Product Innovation, Show more. |
| Expensive valuation multiplesP/SPrice/Sales ratio is 6.1x |
| Key risksPM key risks include [1] targeted regulatory and legal challenges against its core smoke-free products like IQOS and Zyn, Show more. |
Qualitative Assessment
AI Analysis | Feedback
1. Mixed Q4 2025 Earnings and Conservative Q1 2026 Guidance.
Philip Morris International reported Q4 2025 adjusted earnings per share (EPS) of $1.70, meeting consensus estimates, but quarterly revenue of $10.36 billion fell slightly short of analysts' expectations of $10.40 billion. Additionally, the company's Q1 2026 EPS guidance of $1.80 to $1.85 was below the Street's expectation of $1.89, contributing to a lack of strong positive momentum.
2. Foreign Exchange Headwinds and Macroeconomic Uncertainty.
Philip Morris International, which generates virtually all of its revenues internationally, faced foreign exchange translation headwinds due to a strengthening U.S. dollar and renewed global trade policy tensions. These macroeconomic factors impacted reported revenues and earnings expectations for 2026, as observed in the Q4 2025 results where revenue was partly affected by currency drag.
Show more
Stock Movement Drivers
Fundamental Drivers
The -0.6% change in PM stock from 12/31/2025 to 4/2/2026 was primarily driven by a -24.4% change in the company's P/E Multiple.| (LTM values as of) | 12312025 | 4022026 | Change |
|---|---|---|---|
| Stock Price ($) | 158.98 | 158.10 | -0.6% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 39,992 | 40,648 | 1.6% |
| Net Income Margin (%) | 21.6% | 27.9% | 29.4% |
| P/E Multiple | 28.7 | 21.7 | -24.4% |
| Shares Outstanding (Mil) | 1,557 | 1,556 | 0.1% |
| Cumulative Contribution | -0.6% |
Market Drivers
12/31/2025 to 4/2/2026| Return | Correlation | |
|---|---|---|
| PM | -0.6% | |
| Market (SPY) | -5.4% | 19.9% |
| Sector (XLP) | 5.4% | 59.6% |
Fundamental Drivers
The 0.2% change in PM stock from 9/30/2025 to 4/2/2026 was primarily driven by a 32.5% change in the company's Net Income Margin (%).| (LTM values as of) | 9302025 | 4022026 | Change |
|---|---|---|---|
| Stock Price ($) | 157.83 | 158.10 | 0.2% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 39,058 | 40,648 | 4.1% |
| Net Income Margin (%) | 21.1% | 27.9% | 32.5% |
| P/E Multiple | 29.9 | 21.7 | -27.4% |
| Shares Outstanding (Mil) | 1,557 | 1,556 | 0.1% |
| Cumulative Contribution | 0.2% |
Market Drivers
9/30/2025 to 4/2/2026| Return | Correlation | |
|---|---|---|
| PM | 0.2% | |
| Market (SPY) | -2.9% | 0.8% |
| Sector (XLP) | 5.3% | 55.7% |
Fundamental Drivers
The 3.1% change in PM stock from 3/31/2025 to 4/2/2026 was primarily driven by a 49.8% change in the company's Net Income Margin (%).| (LTM values as of) | 3312025 | 4022026 | Change |
|---|---|---|---|
| Stock Price ($) | 153.30 | 158.10 | 3.1% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 37,878 | 40,648 | 7.3% |
| Net Income Margin (%) | 18.6% | 27.9% | 49.8% |
| P/E Multiple | 33.8 | 21.7 | -35.8% |
| Shares Outstanding (Mil) | 1,554 | 1,556 | -0.1% |
| Cumulative Contribution | 3.1% |
Market Drivers
3/31/2025 to 4/2/2026| Return | Correlation | |
|---|---|---|
| PM | 3.1% | |
| Market (SPY) | 16.3% | 8.5% |
| Sector (XLP) | 2.5% | 48.6% |
Fundamental Drivers
The 85.8% change in PM stock from 3/31/2023 to 4/2/2026 was primarily driven by a 48.7% change in the company's P/E Multiple.| (LTM values as of) | 3312023 | 4022026 | Change |
|---|---|---|---|
| Stock Price ($) | 85.10 | 158.10 | 85.8% |
| Change Contribution By: | |||
| Total Revenues ($ Mil) | 31,762 | 40,648 | 28.0% |
| Net Income Margin (%) | 28.5% | 27.9% | -2.0% |
| P/E Multiple | 14.6 | 21.7 | 48.7% |
| Shares Outstanding (Mil) | 1,550 | 1,556 | -0.4% |
| Cumulative Contribution | 85.8% |
Market Drivers
3/31/2023 to 4/2/2026| Return | Correlation | |
|---|---|---|
| PM | 85.8% | |
| Market (SPY) | 63.3% | 12.7% |
| Sector (XLP) | 18.3% | 49.7% |
Price Returns Compared
| 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | Total [1] | |
|---|---|---|---|---|---|---|---|
| Returns | |||||||
| PM Return | 21% | 12% | -2% | 34% | 38% | -1% | 144% |
| Peers Return | 18% | -19% | -9% | 19% | 8% | -19% | -10% |
| S&P 500 Return | 27% | -19% | 24% | 23% | 16% | -4% | 75% |
Monthly Win Rates [3] | |||||||
| PM Win Rate | 67% | 50% | 58% | 67% | 75% | 50% | |
| Peers Win Rate | 50% | 43% | 43% | 52% | 50% | 35% | |
| S&P 500 Win Rate | 75% | 42% | 67% | 75% | 67% | 50% | |
Max Drawdowns [4] | |||||||
| PM Max Drawdown | -5% | -9% | -10% | -5% | -3% | -3% | |
| Peers Max Drawdown | -7% | -31% | -27% | -30% | -24% | -25% | |
| S&P 500 Max Drawdown | -1% | -25% | -1% | -2% | -15% | -7% | |
[1] Cumulative total returns since the beginning of 2021
[2] Peers: MO, TPB, UVV, XXII, PM. See PM Returns vs. Peers.
[3] Win Rate = % of calendar months in which monthly returns were positive
[4] Max drawdown represents maximum peak-to-trough decline within a year
[5] 2026 data is for the year up to 4/2/2026 (YTD)
How Low Can It Go
| Event | PM | S&P 500 |
|---|---|---|
| 2022 Inflation Shock | ||
| % Loss | -25.8% | -25.4% |
| % Gain to Breakeven | 34.8% | 34.1% |
| Time to Breakeven | 664 days | 464 days |
| 2020 Covid Pandemic | ||
| % Loss | -33.1% | -33.9% |
| % Gain to Breakeven | 49.4% | 51.3% |
| Time to Breakeven | 360 days | 148 days |
| 2018 Correction | ||
| % Loss | -46.3% | -19.8% |
| % Gain to Breakeven | 86.3% | 24.7% |
| Time to Breakeven | 2,076 days | 120 days |
| 2008 Global Financial Crisis | ||
| % Loss | -42.2% | -56.8% |
| % Gain to Breakeven | 73.0% | 131.3% |
| Time to Breakeven | 566 days | 1,480 days |
Compare to MO, TPB, UVV, XXII, PM
In The Past
Philip Morris International's stock fell -25.8% during the 2022 Inflation Shock from a high on 2/17/2022. A -25.8% loss requires a 34.8% gain to breakeven.
Preserve Wealth
Limiting losses and compounding gains is essential to preserving wealth.
Asset Allocation
Actively managed asset allocation strategies protect wealth. Learn more.
About Philip Morris International (PM)
AI Analysis | Feedback
- Cigarettes: Philip Morris International manufactures and sells a wide range of traditional tobacco cigarettes globally.
- Smoke-free Products (IQOS): The company offers heated tobacco and nicotine-containing vapor products designed as potentially less harmful alternatives to traditional smoking.
- Related Electronic Devices and Accessories: These include the electronic devices and accompanying accessories necessary for using their smoke-free product lines.
- Other Nicotine-containing Products: Philip Morris International also provides various other products containing nicotine.
AI Analysis | Feedback
Philip Morris International (PM) primarily sells its products to individual consumers. Based on its product offerings and global market presence, the company serves the following categories of adult customers:
- Adult Smokers of Conventional Cigarettes: This category includes adult consumers who purchase and use traditional combustible cigarette brands such as Marlboro, Parliament, Bond Street, Chesterfield, and L&M.
- Adult Consumers of Heated Tobacco Products: This category comprises adult smokers who are transitioning to or exclusively using smoke-free heated tobacco products like IQOS, HEETS, Fiit, and Miix, seeking alternatives to conventional cigarettes.
- Adult Consumers of Other Nicotine-Containing Vapor Products: This category encompasses adult users of the company's nicotine-containing vapor products, which offer an alternative to traditional smoking.
AI Analysis | Feedback
nullAI Analysis | Feedback
Jacek Olczak, Group CEO PMI
Appointed Group CEO PMI in January 2026, Mr. Olczak previously served as PMI's Chief Executive Officer since May 2021. He began his career with PMI in 1993, holding finance and general management positions across Europe, including Managing Director of PMI's markets in Poland and Germany and President of the European Union Region. He was appointed Chief Financial Officer in 2012 and Chief Operating Officer in 2018. Before joining PMI, Mr. Olczak worked for BDO Binder. He holds a master's degree in economics from the University of Lodz, Poland. He is a key driver of PMI's transformation towards a smoke-free future, expanding the company's product portfolio into wellness and healthcare.
Emmanuel Babeau, Group Chief Financial Officer
Mr. Babeau was appointed Group Chief Financial Officer in January 2026, having served as PMI's Chief Financial Officer since May 2020. Prior to joining PMI, he spent over a decade at Schneider Electric, where he served as Deputy CEO in charge of Finance and Legal Affairs. He joined Schneider Electric in 2009 as Executive Vice President, Finance and a member of the Management Board. From 1993 to 2009, he worked at Pernod Ricard, initially as an Internal Auditor, and then in several executive positions, including Chief Financial Officer and Group Deputy Managing Director. He started his career at Arthur Andersen in 1990. Mr. Babeau sits on the board of Davide Campari-Milano N.V. and previously served as Vice Chairman of AVEVA Group plc and as an independent director at Sanofi S.A. and Sodexo.
Scott Coutts, Chief Global Operations Officer
Mr. Coutts was appointed Chief Global Operations Officer in January 2026, having served as PMI's Senior Vice President, Operations since January 2023. He oversees PMI's manufacturing footprint, supply chain, and related functions. Mr. Coutts joined PMI in 1995 as an Operations trainee at Philip Morris Australia. He held positions of increasing responsibility in various geographies, including Indonesia, Lithuania, and Russia. In 2016, he was appointed Vice President, Reduced-Risk Products Manufacturing and Supply Chain, and in 2018, Vice President, Global Manufacturing.
Moira Gilchrist, Chief Global Communications Officer
Dr. Gilchrist was appointed Chief Global Communications Officer in January 2026, having served as PMI's Chief Communications Officer since January 2024. Before that, she was Vice President, Strategic and Scientific Communications, a role she assumed in 2018. Since joining PMI in 2006, Dr. Gilchrist has held several positions, including leading the Reduced-Risk Products Corporate Affairs team, Director of Scientific Engagement within the R&D function, and working in both product development and commercialization. Prior to joining the company, Dr. Gilchrist worked in the pharmaceutical sector for more than a decade.
Stefano Volpetti, Chief Global Growth Officer
Mr. Volpetti became Chief Global Growth Officer in January 2026. He was previously President, Smoke-Free Products Category & Chief Consumer Officer since May 2025. He joined PMI in 2019 as Chief Consumer Officer. Before joining PMI, Mr. Volpetti worked at Procter & Gamble for 22 years and also served as Chief Marketing Officer at Luxottica Eyewear in 2015.
AI Analysis | Feedback
The key risks to Philip Morris International (PM) are:- Declining cigarette consumption volumes and increasing regulatory and taxation pressures on traditional tobacco products. The global trend towards reduced smoking due to health awareness campaigns, public smoking bans, and increased excise taxes consistently pressures the company's traditional cigarette business, which still forms a significant portion of its revenue.
- Regulatory scrutiny and potential restrictions on smoke-free products. While Philip Morris International is strategically investing in and expanding its portfolio of smoke-free products like IQOS, these products are not immune to evolving regulatory landscapes. Governments globally may impose stricter marketing limitations, flavor bans, or higher taxes as the long-term health impacts are further studied and debated, potentially hindering the growth and profitability of these next-generation products.
- Intense competition within the rapidly growing smoke-free and reduced-risk product categories. As the market for heated tobacco and e-vapor products expands, Philip Morris International faces increasing competition from other established tobacco companies and new entrants. This heightened competition could lead to pricing pressures, increased marketing and research & development expenses, and challenges in maintaining or gaining market share for its innovative products.
AI Analysis | Feedback
The expanding legalization and growing consumer adoption of cannabis and cannabis-derived products (e.g., vapes, edibles, beverages) present a clear emerging threat. As these products become more accessible and destigmatized in various global markets where Philip Morris International operates, they represent an alternative for adult consumers seeking relaxation, recreation, or stress relief. This trend could potentially divert discretionary spending and shift consumption habits away from nicotine products, impacting PM's core cigarette business and its strategic focus on smoke-free alternatives like IQOS.
AI Analysis | Feedback
Philip Morris International (PM) operates in several significant addressable markets for its main products and services, including traditional cigarettes, heated tobacco products, e-cigarettes and vaping products, and nicotine pouches.
Cigarettes
The global cigarette market was valued at approximately USD 1,143.4 billion in 2024 and is projected to reach USD 1,380.2 billion by 2033. The Asia-Pacific region holds the largest share of the global cigarette market, while the Middle East and Africa region is experiencing the fastest growth.
Heated Tobacco Products (Smoke-Free Products like IQOS)
The global heated tobacco products market, which includes products like IQOS, was estimated at USD 49.14 billion in 2024. This market is projected for substantial growth, with some estimates indicating it could reach USD 898.86 billion by 2030, growing at a compound annual growth rate (CAGR) of 63.2% from 2025 to 2030. The Asia Pacific region accounted for a dominant revenue share of 68.9% in the global market for heated tobacco products in 2024, with Japan being a major adopter.
E-cigarettes and Vaping Products (Nicotine-Containing Vapor Products)
The global e-cigarette and vape market size was estimated at USD 45.74 billion in 2025. Projections show this market could reach USD 462.14 billion by 2033, with a CAGR of 34.1% from 2026 to 2033. North America held a significant share of the market, accounting for 43.5% in 2025.
Nicotine Pouches
The global nicotine pouches market was estimated at USD 7.5 billion in 2024. This market is expected to grow to USD 44.2 billion by 2034, at a CAGR of 19.9%. North America dominated the nicotine pouches market with 78.9% of the revenue share in 2024.
AI Analysis | Feedback
Philip Morris International (PM) is set to drive future revenue growth over the next 2-3 years through several strategic initiatives, primarily focusing on its smoke-free product portfolio and leveraging its market position.
Here are 3-5 expected drivers of future revenue growth:
- Expansion and Innovation in Smoke-Free Products (IQOS, ZYN, VEEV): The company's most significant revenue growth driver is the continued global expansion and innovation within its smoke-free product categories. This includes heated tobacco units (HTUs) under the IQOS brand, which is seeing new variants like IQOS ILUMA and TEREA, and is the core driver of smoke-free growth. Additionally, nicotine pouches, particularly the ZYN brand acquired through Swedish Match, are experiencing rapid volume growth in key markets like the U.S. and Europe, fueled by expanded manufacturing capacity. The e-vapor product VEEV also contributes to this portfolio expansion.
- Strategic Geographic Market Expansion for Smoke-Free Portfolio: Philip Morris International is aggressively expanding the availability of its smoke-free products into new geographies and increasing penetration in existing markets. A notable upcoming driver is the re-entry of IQOS into the U.S. market in 2024-2025, following the termination of its licensing agreement with Altria, which is expected to accelerate growth. The company aims to make IQOS available in over 100 markets by mid-decade and its overall smoke-free portfolio reached 106 markets by Q4 2025.
- Sustained Pricing Power Across Product Categories: Philip Morris International consistently benefits from its ability to implement strategic price increases across both its smoke-free and traditional combustible tobacco products. This pricing power contributes significantly to organic net revenue growth, helping to offset the declining volumes of conventional cigarettes while enhancing profitability from the growing smoke-free segments.
AI Analysis | Feedback
Share Repurchases
- In June 2021, Philip Morris International authorized a new share repurchase program of up to $7 billion, with target spending of $5 billion to $7 billion over a three-year period.
- The company strategically paused share repurchases in 2025 to focus capital allocation on strategic investments and dividend growth.
- Philip Morris International made an "insignificant amount" of $209 million in share repurchases in 2022.
Share Issuance
- Philip Morris' shares outstanding showed slight increases from 1.552 billion in December 2022 to 1.558 billion in December 2025, representing minor annual increases between 0.06% and 0.19%.
Outbound Investments
- In 2021, Philip Morris International acquired Fertin Pharma for approximately $820 million and American inhaled drug specialist OtiTopic for an undisclosed sum. Additionally, it made an unconditional offer to acquire the U.K. pharmaceutical company Vectura for £1 billion.
- In March 2022, Philip Morris International acquired an 82.59% stake in Swedish Match for $16 billion, strengthening its position in alternative nicotine products, notably the Zyn nicotine pouch brand.
- PM Equity Partner, Philip Morris International's venture capital arm, invests in early-stage and growth-stage companies within life sciences, industrial technologies, consumer engagement, and product technologies.
Capital Expenditures
- Capital expenditures in 2025 were approximately $1.6 billion, primarily directed towards investments supporting the smoke-free business.
- For 2026, expected capital expenditures are projected to be between $1.4 billion and $1.6 billion, predominantly allocated to supporting the smoke-free business.
- From 2019 to 2023, Philip Morris International invested over €2.3 billion in research and development across Europe to drive innovation and scientific advancements.
Latest Trefis Analyses
Trade Ideas
Select ideas related to PM.
| Date | Ticker | Company | Category | Trade Strategy | 6M Fwd Rtn | 12M Fwd Rtn | 12M Max DD |
|---|---|---|---|---|---|---|---|
| 03272026 | MZTI | Marzetti | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 0.9% | 0.9% | 0.0% |
| 03272026 | TAP | Molson Coors Beverage | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -0.8% | -0.8% | -1.1% |
| 03202026 | KHC | Kraft Heinz | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 4.3% | 4.3% | -1.7% |
| 03202026 | KMB | Kimberly-Clark | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | -1.8% | -1.8% | -1.9% |
| 03202026 | MKC | McCormick | Dip Buy | DB | P/E OPMDip Buy with Low PE and High MarginBuying dips for companies with tame PE and meaningfully high operating margin | -5.2% | -5.2% | -5.2% |
| 05312019 | PM | Philip Morris International | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 10.9% | 1.3% | -17.2% |
| 08312018 | PM | Philip Morris International | Dip Buy | DB | FCFY OPMDip Buy with High FCF Yield and High MarginBuying dips for companies with high FCF yield and meaningfully high operating margin | 15.7% | -2.0% | -12.8% |
Research & Analysis
Invest in Strategies
Wealth Management
Peer Comparisons
| Peers to compare with: |
Financials
| Median | |
|---|---|
| Name | |
| Mkt Price | 65.76 |
| Mkt Cap | 1.4 |
| Rev LTM | 2,912 |
| Op Inc LTM | 228 |
| FCF LTM | 53 |
| FCF 3Y Avg | 61 |
| CFO LTM | 101 |
| CFO 3Y Avg | 123 |
Growth & Margins
| Median | |
|---|---|
| Name | |
| Rev Chg LTM | -1.5% |
| Rev Chg 3Y Avg | 5.1% |
| Rev Chg Q | -0.5% |
| QoQ Delta Rev Chg LTM | -0.1% |
| Op Mgn LTM | 20.6% |
| Op Mgn 3Y Avg | 22.8% |
| QoQ Delta Op Mgn LTM | -0.3% |
| CFO/Rev LTM | 12.4% |
| CFO/Rev 3Y Avg | 17.2% |
| FCF/Rev LTM | 9.5% |
| FCF/Rev 3Y Avg | 15.2% |
Valuation
| Median | |
|---|---|
| Name | |
| Mkt Cap | 1.4 |
| P/S | 3.0 |
| P/EBIT | 10.4 |
| P/E | 15.9 |
| P/CFO | 13.1 |
| Total Yield | 8.1% |
| Dividend Yield | 3.5% |
| FCF Yield 3Y Avg | 5.1% |
| D/E | 0.2 |
| Net D/E | 0.2 |
Returns
| Median | |
|---|---|
| Name | |
| 1M Rtn | -10.4% |
| 3M Rtn | -0.6% |
| 6M Rtn | -3.0% |
| 12M Rtn | 4.8% |
| 3Y Rtn | 84.6% |
| 1M Excs Rtn | -6.7% |
| 3M Excs Rtn | 3.3% |
| 6M Excs Rtn | -0.9% |
| 12M Excs Rtn | -13.3% |
| 3Y Excs Rtn | 21.7% |
Comparison Analyses
Price Behavior
| Market Price | $158.10 | |
| Market Cap ($ Bil) | 246.0 | |
| First Trading Date | 03/17/2008 | |
| Distance from 52W High | -16.0% | |
| 50 Days | 200 Days | |
| DMA Price | $174.50 | $163.25 |
| DMA Trend | indeterminate | up |
| Distance from DMA | -9.4% | -3.2% |
| 3M | 1YR | |
| Volatility | 29.4% | 26.4% |
| Downside Capture | 0.22 | -0.07 |
| Upside Capture | 46.66 | -4.17 |
| Correlation (SPY) | 18.9% | 8.4% |
| 1M | 2M | 3M | 6M | 1Y | 3Y | |
|---|---|---|---|---|---|---|
| Beta | 0.49 | 0.21 | 0.45 | 0.01 | 0.12 | 0.19 |
| Up Beta | 2.12 | 1.34 | 0.58 | 0.34 | 0.21 | 0.19 |
| Down Beta | -0.86 | -0.23 | 0.60 | -0.02 | 0.27 | 0.24 |
| Up Capture | 20% | -9% | 45% | -1% | -2% | 8% |
| Bmk +ve Days | 7 | 16 | 27 | 65 | 139 | 424 |
| Stock +ve Days | 12 | 23 | 36 | 66 | 141 | 420 |
| Down Capture | 129% | 43% | 30% | -8% | -22% | 9% |
| Bmk -ve Days | 12 | 23 | 33 | 58 | 110 | 323 |
| Stock -ve Days | 10 | 19 | 27 | 59 | 110 | 326 |
[1] Upside and downside betas calculated using positive and negative benchmark daily returns respectively
Based On 1-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with PM | |
|---|---|---|---|---|
| PM | 3.6% | 26.4% | 0.11 | - |
| Sector ETF (XLP) | 2.3% | 13.8% | -0.07 | 48.6% |
| Equity (SPY) | 16.1% | 19.0% | 0.67 | 8.5% |
| Gold (GLD) | 50.5% | 28.0% | 1.46 | 11.4% |
| Commodities (DBC) | 16.2% | 17.7% | 0.77 | 1.5% |
| Real Estate (VNQ) | 3.6% | 16.5% | 0.04 | 21.0% |
| Bitcoin (BTCUSD) | -20.1% | 44.0% | -0.38 | 0.4% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 5-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with PM | |
|---|---|---|---|---|
| PM | 17.2% | 21.9% | 0.68 | - |
| Sector ETF (XLP) | 6.3% | 13.1% | 0.26 | 53.9% |
| Equity (SPY) | 11.6% | 17.0% | 0.53 | 24.6% |
| Gold (GLD) | 21.7% | 17.8% | 1.00 | 13.1% |
| Commodities (DBC) | 11.6% | 18.8% | 0.51 | 6.2% |
| Real Estate (VNQ) | 3.3% | 18.8% | 0.08 | 35.2% |
| Bitcoin (BTCUSD) | 4.3% | 56.5% | 0.30 | 6.2% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Based On 10-Year Data
| Annualized Return | Annualized Volatility | Sharpe Ratio | Correlation with PM | |
|---|---|---|---|---|
| PM | 10.3% | 24.1% | 0.41 | - |
| Sector ETF (XLP) | 7.4% | 14.7% | 0.37 | 63.6% |
| Equity (SPY) | 14.0% | 17.9% | 0.67 | 42.9% |
| Gold (GLD) | 14.0% | 15.9% | 0.73 | 9.3% |
| Commodities (DBC) | 8.4% | 17.6% | 0.40 | 16.4% |
| Real Estate (VNQ) | 5.2% | 20.7% | 0.22 | 46.9% |
| Bitcoin (BTCUSD) | 66.5% | 66.8% | 1.06 | 9.1% |
Smart multi-asset allocation framework can stack odds in your favor. Learn How
Returns Analyses
Earnings Returns History
Expand for More| Forward Returns | |||
|---|---|---|---|
| Earnings Date | 1D Returns | 5D Returns | 21D Returns |
| 2/6/2026 | 0.4% | 3.8% | -4.8% |
| 10/21/2025 | -3.8% | -3.1% | -1.4% |
| 7/22/2025 | -8.4% | -12.6% | -6.5% |
| 4/23/2025 | 2.4% | 3.7% | 6.4% |
| 2/6/2025 | 10.9% | 14.4% | 15.2% |
| 10/22/2024 | 10.5% | 9.7% | 8.9% |
| 7/23/2024 | 2.2% | 6.7% | 11.0% |
| 4/23/2024 | 3.8% | 1.6% | 6.6% |
| ... | |||
| SUMMARY STATS | |||
| # Positive | 13 | 13 | 13 |
| # Negative | 11 | 11 | 11 |
| Median Positive | 2.5% | 6.7% | 7.4% |
| Median Negative | -3.1% | -2.5% | -4.8% |
| Max Positive | 10.9% | 14.4% | 15.2% |
| Max Negative | -8.4% | -12.6% | -14.6% |
Recent Forward Guidance [BETA]
Latest: Q4 2025 Earnings Reported 2/6/2026
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| Q1 2026 Adjusted Diluted EPS | 1.8 | 1.82 | 1.85 | Higher New | |||
| 2026 Net Revenue Growth | 5.0% | 6.0% | 7.0% | -14.3% | -1.0% | Lowered | Guidance: 7.0% for 2025 |
| 2026 Organic Operating Income Growth | 7.0% | 8.0% | 9.0% | -25.6% | -2.8% | Lowered | Guidance: 10.75% for 2025 |
| 2026 Adjusted Diluted EPS | 8.38 | 8.46 | 8.53 | 12.6% | Higher New | Actual: 7.51 for 2025 | |
| 2026 Operating Cash Flow | 13.50 Bil | 17.4% | Higher New | Actual: 11.50 Bil for 2025 | |||
| 2026 Capital Expenditures | 1.40 Bil | 1.50 Bil | 1.60 Bil | -6.2% | Lower New | Actual: 1.60 Bil for 2025 | |
| 2028 Net Revenue Growth (CAGR) | 6.0% | 7.0% | 8.0% | Higher New | |||
| 2028 Operating Income Growth (CAGR) | 8.0% | 9.0% | 10.0% | Higher New | |||
| 2028 Adjusted Diluted EPS Growth (CAGR) | 9.0% | 10.0% | 11.0% | Higher New | |||
Prior: Q3 2025 Earnings Reported 10/21/2025
| Forward Guidance | Guidance Change | ||||||
|---|---|---|---|---|---|---|---|
| Metric | Low | Mid | High | % Chg | % Delta | Change | Prior |
| 2025 Reported Diluted EPS | 7.39 | 7.44 | 7.49 | 1.8% | Raised | Guidance: 7.3 for 2025 | |
| 2025 Adjusted Diluted EPS | 7.46 | 7.51 | 7.56 | 0.2% | Raised | Guidance: 7.5 for 2025 | |
| 2025 Smoke-free product volume growth | 12.0% | 13.0% | 14.0% | 0 | 0 | Affirmed | Guidance: 13.0% for 2025 |
| 2025 Net revenue growth | 6.0% | 7.0% | 8.0% | 0 | 0 | Affirmed | Guidance: 7.0% for 2025 |
| 2025 Organic operating income growth | 10.0% | 10.75% | 11.5% | -8.5% | -1.0% | Lowered | Guidance: 11.75% for 2025 |
| 2025 Operating cash flow | 11.50 Bil | 0 | Affirmed | Guidance: 11.50 Bil for 2025 | |||
| 2025 Capital expenditures | 1.60 Bil | 0 | Affirmed | Guidance: 1.60 Bil for 2025 | |||
Insider Activity
Expand for More| # | Owner | Title | Holding | Action | Filing Date | Price | Shares | Transacted Value | Value of Held Shares | Form |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | Dahlgren, Lars | Pres. Smoke-Free Oral Products | Direct | Sell | 3072025 | 152.96 | 3,679 | 562,740 | 4,103,611 | Form |
| 2 | Babeau, Emmanuel | Group Chief Financial Officer | Direct | Sell | 2202026 | 181.61 | 33,800 | 6,138,418 | 29,868,125 | Form |
| 3 | Dobrowolski, Reginaldo | Group Controller | Direct | Sell | 2202026 | 183.46 | 5,000 | 917,300 | 3,886,050 | Form |
| 4 | Dobrowolski, Reginaldo | Group Controller | Spouse | Sell | 2202026 | 183.58 | 1,000 | 183,580 | 1,331,689 | Form |
| 5 | Guerin, Yann | Group Chief Legal Officer | Direct | Sell | 2202026 | 181.69 | 4,000 | 726,760 | 6,252,316 | Form |
PM Trade Sentinel
OVERWEIGHT (Score 9-10)
CONVICTION RATIONALE
The high probability of the bull case succeeding, driven by a widening moat and strong leading indicators, creates a highly attractive risk/reward profile despite balanced raw upside/downside. The market seems to be overly focused on the risks, creating the opportunity, justifying a high conviction ranking.
STOCK ARCHETYPE
Transformational Growth CompounderThe company is undergoing a significant business transformation from traditional tobacco to a superior growth and margin profile from smoke-free products, offering re-rating potential.
INVESTMENT THESIS
The company's transition to smoke-free products is accelerating, driving superior growth and margin profiles that the market has yet to fully appreciate.
- Smoke-Free Product Volume Growth +12.8% in FY2025
- IQOS IMS growth accelerated to 12% in Q4
PRIMARY RISK
Regulatory interventions, specifically a European flavor ban, could slow the adoption of smoke-free products and negatively impact the company's growth trajectory.
- The Anti-Alpha (European flavor ban) materializes
| KPI | Threshold | Rationale |
|---|---|---|
| Smoke-Free Product Volume Growth | Sustained growth above +12.8% (FY2025 level) | This is the key leading indicator for the success of the smoke-free transition and market re-rating. |
| IQOS IMS growth | Continued acceleration from 12% in Q4 | Specific indicator for the performance of a key smoke-free product. |
| Regulatory Landscape (Europe) | Absence of widespread flavor bans or other restrictive regulations | This is the primary anti-alpha risk; monitoring regulatory developments is crucial. |
Smoke-Free Growth Durability vs. Peak Saturation
BULL VIEW
The global transition from combustibles is a durable tailwind. Accelerating IQOS growth (+12% in Q4) and dominant market share (~76% HTU) will drive predictable earnings growth.
CORE TENSION
Whether PM's high-margin smoke-free growth (IQOS, ZYN) can outpace competitive threats, regulatory hurdles, and signs of growth deceleration in key products.
PREVAILING SENTIMENT
The latest data shows a divergence: accelerating IQOS in-market sales growth (+12%) conflicts with decelerating ZYN shipment growth (19%), indicating a mixed momentum signal.
BEAR VIEW
ZYN growth is decelerating rapidly (19% Q4 vs 37% FY). New competitors are eroding IQOS share in bellwether markets like Japan. Regulatory risk is rising.
| Timeline | Event & Metric To Watch |
|---|---|
Late April 2026 | Q1 2026 Earnings Call Watch: IQOS market share in Japan and ZYN volume growth rate (YoY). |
Q1-Q2 2026 | EU Regulatory Update on Flavored Tobacco Watch: Formal proposal from European Commission regarding flavored heated tobacco products. |
Next 6 Months | Competitor (BAT/JTI) Next-Gen HTP Launch Watch: Press release announcing global rollout of 'glo Hilo' or similar advanced HTP. |
Next 6 Months | FDA Communication on IQOS ILUMA Watch: Official FDA letter or update on the Premarket Tobacco Product Application (PMTA). |
| Date | Event | Stock Impact |
|---|---|---|
Sep 15, 2025 | Insider Selling Disclosure Details: Reports of a cluster of open-market stock sales by senior executives with no corresponding buys may have signaled a lack of insider conviction to the market. | Fell notably by 2.7% $163.07 -> $158.68 |
Oct 21, 2025 | Q3 2025 Earnings Release Details: The earnings report and outlook likely contained details on slowing ZYN growth or other factors that concerned investors, causing a significant stock pullback. | Fell notably by 3.8% $156.63 -> $150.62 |
Nov 18, 2025 | Investor Day Presentation Details: The company presented its long-term strategy, likely reassuring investors on its growth trajectory and capital allocation plans, leading to a positive market reaction. | Rose significantly by 2.0% $151.37 -> $154.44 |
Jan 6, 2026 | Competitive Intelligence Report Details: A survey indicated market share for the flagship IQOS product in Japan had declined, raising concerns about technological competition from rivals like BAT's glo. | Fell notably by 2.9% $159.86 -> $155.16 |
Jan 18, 2026 | Strategic/Regulatory Event Details: Poland's ban on flavored heated tobacco products became effective, setting a negative precedent for potential regulation in larger European Union markets. | Fell notably by 3.7% $173.62 -> $167.18 |
Feb 6, 2026 | Q4 2025 Earnings Release Details: PM reported FY25 results meeting EPS estimates. Despite negative pre-market sentiment cited in reports, the stock closed with a muted gain based on closing prices. | Flat (0.5%) $182.00 -> $182.81 |
Position Sizing
4%-6%
NORMAL
Stock is trading with Moderate volatility (2.2x S&P). While the moat is strong and visibility high, Neutral sentiment from decelerating ZYN growth prevents a max position. Valuation is not cheap.
Diversification Alternatives
IBKR
OTHEROffers diversification from consumer regulatory risk. Growth is tied to market volatility and interest rates, providing a different set of drivers than nicotine trends.
HALO
OTHERCompletely uncorrelated business model. Success is driven by partner drug development and sales (royalty streams), not consumer habits or tobacco regulation.
Trading at a Trailing P/E of 26.1 and a Forward P/E of 23.6, Philip Morris is re-rating from a declining combustibles business into a high-margin, growing consumer staples company as its smoke-free products now generate over 41.5% of total revenue and nearly 43% of gross profit.
Filter all news through the lens of the smoke-free transition's velocity and profitability, focusing on heated tobacco (IQOS) and oral nicotine (ZYN) volume growth as the primary drivers of shareholder returns.
Smoke-free net revenue growth >+15% YoY; ZYN US shipment volumes exceeding 200M cans per quarter; IQOS gaining >1% share per year in key European markets; any positive regulatory developments regarding US re-entry for IQOS.
Deceleration of ZYN volume growth in the US below 15%; significant excise tax increases specifically targeting heated tobacco or oral nicotine products in major markets; a full or flavored-product ban on oral nicotine pouches in the US.
Quarterly fluctuations in combustible cigarette volumes (the long-term decline is structural and priced in); minor competitive product launches from smaller players (market share shifts are slow); currency fluctuations (management guides on a currency-neutral basis).
Repricing Catalyst
The rapid and high-margin growth of ZYN oral nicotine pouches in the U.S. and the global expansion of IQOS heated tobacco are driving a significant mix shift. Smoke-free products contributed ~$16.9 billion (41.5%) of the $40.6 billion in FY2025 revenue, growing 15% YoY. This segment has a gross margin ~4 percentage points higher than traditional cigarettes, accelerating profit growth and justifying a valuation multiple closer to other high-growth consumer staples.
Smoke-Free Products (Heated Tobacco & Oral Nicotine)
$16.9B TTM (41.5% of Total) · 69.2% MarginWhat It Is
IQOS Heat-not-Burn devices with TEREA/HEETS tobacco sticks; ZYN oral nicotine pouches; VEEV e-vapor products.
Who Pays & How
Over 43 million adult consumers pay for these products as an alternative to smoking. The IQOS ecosystem creates lock-in as the device is required to use the high-margin consumable tobacco sticks. ZYN's appeal is its discreet, smoke-free oral usage.
Competition
Combustible Tobacco Products
$23.8B TTM (58.5% of Total) · 65.3% MarginWhat It Is
Traditional cigarettes, including flagship brands like Marlboro, Parliament, Chesterfield, and L&M.
Who Pays & How
Adult smokers globally pay for these products due to brand loyalty built over decades, nicotine addiction, and established social habits. Marlboro is the world's best-selling cigarette brand outside of China.
Competition
External Quote Links
| Y Finance | Barrons |
| TradingView | Morningstar |
| SeekingAlpha | ValueLine |
| Motley Fool | Robinhood |
| CNBC | Etrade |
| MarketWatch | Unusual Whales |
| YCharts | Perplexity Finance |
| FinViz |
Prefer one of these to Trefis? Tell us why.