Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Philip Morris, driven by higher revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Philip Morris is expected to report quarterly earnings of $2.10 per share, reflecting a +10% year-over-year change, and revenues of $10.66 billion, which is a 7.6% increase from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 0.02% over the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Philip Morris is lower than the consensus estimate, resulting in an Earnings ESP of -0.66%, suggesting bearish sentiment among analysts [12]. Historical Performance - Philip Morris has consistently beaten consensus EPS estimates in the past four quarters, with a notable surprise of +3.24% in the last reported quarter [13][14]. Investment Considerations - Despite the historical performance, the current combination of a negative Earnings ESP and a Zacks Rank of 3 makes it challenging to predict an earnings beat for Philip Morris [12][17].

Group 1 - Philip Morris International Inc. (NYSE:PM) is recognized as a strong stock, with Jim Cramer highlighting it as one of his favorites despite personal reservations about its product line [1] - The company manufactures and sells cigarettes and smoke-free products, including IQOS and ZYN nicotine brands, and is actively working to transition away from traditional tobacco products [1] - Cramer acknowledges the company's strong performance and potential for continued success, although he refrains from recommending the stock due to its core business [1] Group 2 - The article suggests that while PM has investment potential, certain AI stocks may offer greater upside and lower downside risk, indicating a shift in investment focus [1]

Industry Overview - The Zacks Tobacco industry is facing significant challenges, including declining cigarette sales due to shifting consumer preferences, inflationary pressures, and tightening regulations [1][4] - Rising health awareness and stricter restrictions on smoking are reducing demand for traditional tobacco products, negatively impacting overall industry performance [1][4] Key Trends - **Challenges in Cigarette Sales Volumes**: The industry is experiencing a decline in cigarette sales driven by inflation and changing consumer spending patterns, alongside regulatory restrictions on sales and advertising [4] - **Escalated Costs**: Industry participants are affected by cost inflation related to essential materials, energy, and labor, which poses risks to profit margins [5] - **Rising Popularity of Smoke-Free Options**: There is a growing demand for smoke-free alternatives like heated tobacco and vapor products, driven by health awareness and regulatory changes [6] Industry Performance - The Zacks Tobacco industry currently ranks 165, placing it in the bottom 32% of over 243 Zacks industries, indicating dull near-term prospects [7][8] - The industry's consensus estimate for current financial year earnings has decreased by 1.2% since August 2025, reflecting a negative earnings outlook [9] Market Comparison - Over the past year, the Zacks Tobacco industry has outperformed the S&P 500, gaining 36.4% compared to the S&P 500's growth of 18.4% [11] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 14.44X, lower than the S&P 500's 23.53X and the sector's 16.37X [14] Company Highlights - **Philip Morris International**: This company is transitioning towards a smoke-free future, focusing on reduced-risk products (RRPs) and has seen a 30% increase in shares over the past year [17][19] - **Altria Group**: Altria is prioritizing RRPs and has experienced a 31.7% surge in shares over the past year, supported by its strong legacy brands [22][23] - **Turning Point Brands**: This company has gained momentum with a 105.8% increase in shares over the past year, focusing on innovative product launches and expanding distribution channels [26][28]

Core Viewpoint - Philip Morris International is seeking approval from the U.S. Food and Drug Administration to market its heated tobacco products as a "modified risk tobacco product" in the U.S. [2] Group 1 - The company emphasizes the benefits of heating tobacco instead of burning it, which is a key aspect of its product differentiation [2]

Core Insights - Philip Morris International Inc. presented evidence to the Tobacco Products Scientific Advisory Committee (TPSAC) regarding its IQOS heated tobacco products [1] - The TPSAC is composed of independent scientific researchers and provides nonbinding recommendations to the U.S. Food and Drug Administration's (FDA) Center for Tobacco Products (CTP) [1] - The meeting held on October 7 was part of the FDA's customary review process for PMI's request to continue marketing its IQOS products [1]

Core Insights - Philip Morris International has returned $74 billion to shareholders over the last decade through dividends and buybacks, achieving a 30% year-to-date return in 2025, outperforming the broader market [2] - The company announced an 8.9% dividend increase in September 2025, raising the quarterly dividend to $1.47 per share, marking the 18th consecutive year of dividend increases since its public listing in 2008 [2] - In the first half of 2025, Philip Morris reported revenue and earnings that exceeded expectations, with smoke-free products now accounting for 42% of total net revenues [3] Financial Performance - Philip Morris has paused share repurchases in 2025 to focus on strategic investments and dividend growth, maintaining a disciplined approach with an industry-leading dividend yield of approximately 3.84% [4] - The company has achieved a revenue growth of 7.2% over the last twelve months and a 7.1% average over the last three years, with a free cash flow margin of almost 23.0% and an operating margin of 36.4% [12] Shareholder Returns - Philip Morris ranks as the 31st largest company in history for total capital returned to shareholders, reflecting management's confidence in financial stability and consistent cash flows [6] - The total capital returned to shareholders as a percentage of the current market cap appears inversely proportional to growth prospects for reinvestments, with companies like META and MSFT showing faster growth but returning a smaller portion of their market cap [8] Valuation Metrics - Philip Morris has a P/E multiple of 29.0, providing higher valuation, greater revenue growth, and improved margins compared to the S&P [12]

Group 1: Honeywell - Honeywell declared a 5% increase in its quarterly dividend, raising it to $1.19 per share [4] - The company is undergoing a significant transition, splitting into three separate entities: Solstice Advanced Materials, Honeywell Automation, and Honeywell Aerospace, with the first split expected by the end of this year [5] - In its last reported quarter as a single entity, Honeywell achieved an 8% year-over-year revenue growth, reaching $10.4 billion, while GAAP net income increased marginally to almost $1.6 billion [6] - The company raised its revenue and profitability guidance for full-year 2025, driven by high demand for aerospace components and maintenance offerings [7] - The new dividend will be paid on December 5 to investors of record as of November 14, yielding just under 2.3% at the most recent closing share price [8] Group 2: Philip Morris International - Philip Morris International announced a 9% increase in its quarterly dividend, raising it to $1.47 per share, continuing its streak of annual dividend raises since 2009 [10] - The company reported a 15% year-over-year increase in sales of its "smoke-free" products, totaling $4.2 billion, while traditional cigarette sales rose by 2% to $6 billion, leading to total revenue of over $10 billion, a 7% gain [12] - Net income saw a significant boost of 25%, exceeding $3.1 billion, prompting management to raise bottom-line guidance for 2025 [13] - Despite the positive results, there is concern as cigarette shipments declined by 1.5%, indicating potential challenges in maintaining growth from traditional products [14] - The enhanced dividend is set to be paid on October 20 to stockholders of record as of October 3, yielding a theoretical 3.6% at the current share price [15]

Company Overview - Philip Morris International Inc. (PM) has a market capitalization of $250.4 billion and operates in over 180 countries, primarily known for its cigarette and smoke-free product brands, including Marlboro, the top-selling international cigarette brand [1] Earnings Expectations - The company is set to announce its fiscal Q3 2025 earnings results on October 21, with analysts predicting an adjusted EPS of $2.11, reflecting a 10.5% increase from $1.91 in the same quarter last year [2] - For fiscal 2025, the expected adjusted EPS is $7.52, which represents a 14.5% increase from $6.57 in fiscal 2024 [3] Stock Performance - Over the past 52 weeks, shares of Philip Morris have increased by 32%, outperforming the S&P 500 Index's rise of 17.6% and the Consumer Staples Select Sector SPDR Fund's decline of 5% [4] - Following the Q2 earnings release on July 22, shares dropped by 8.4%, despite reporting a net revenue of $10.1 billion, which grew by 7.1% year-over-year, and an adjusted EPS of $1.91, surpassing analyst estimates of $1.85 with a year-over-year increase of 20.1% [5] Analyst Ratings - The consensus view among analysts is cautiously optimistic, with a "Moderate Buy" rating overall. Out of 15 analysts, nine recommend "Strong Buy," two suggest "Moderate Buy," and four advise "Hold" [6] - The average analyst price target for Philip Morris is $193.77, indicating a potential upside of 22.7% from current market prices [6]

Core Points - Philip Morris International (PMI) U.S. announced a $37 million investment in its manufacturing facility in Wilson, North Carolina, aimed at expanding operations and supporting the company's mission to provide smoke-free alternatives to adult smokers [1][2] - The investment is part of PMI U.S.'s broader "Invested in America" platform, which focuses on increasing U.S. manufacturing and innovation capacity through strategic investments [1][5] - The Wilson facility currently employs over 80 full-time staff and produces HEETS for IQOS 3.0, the only heated tobacco product authorized by the FDA as a modified risk tobacco product [2][3] Investment and Economic Impact - The expansion in Wilson is expected to generate economic activity in the local community and reinforce PMI U.S.'s long-term commitment to American manufacturing [1][2] - PMI U.S. has previously invested hundreds of millions of dollars in U.S. manufacturing and innovation, including a $232 million expansion in Owensboro, Kentucky, and a $600 million investment in Aurora, Colorado, which together will create nearly 1,000 direct jobs [5] Product Development - The Wilson expansion will add a production line for TEREA, consumables for the IQOS ILUMA heated tobacco system, with premarket tobacco product applications submitted to the FDA on October 20, 2023 [4] - IQOS 3.0 is currently being commercialized in select locations, including Austin, Texas, and Jackson, Mississippi, as well as on military bases [4]

Core Insights - The article highlights the ten strongest mega-cap stocks in 2025, emphasizing their performance based on year-to-date percent change and underlying growth drivers [3][14]. Group 1: Company Performances - **Palantir (PLTR)** is identified as the strongest performing mega-cap stock, benefiting from a unique platform-based approach that integrates data, analytics, and operational workflows, leading to sustainable recurring revenue growth [3]. - **AppLovin (APP)** has shown triple-digit earnings growth over the past four quarters, driven by robust mobile-ad demand and strategic investments in user acquisition and monetization services [4]. - **General Electric (GE)** has experienced a turnaround, focusing on higher-value services and long-term agreements, which increased recurring revenue and improved investor confidence [5]. - **Oracle (ORCL)** saw its stock rise over 40% following strong earnings, attributed to its pivot towards multi-year cloud services and autonomous database capabilities [6][7]. - **Uber (UBER)** has expanded beyond ride-hailing, leveraging a multi-pronged growth strategy that includes delivery and logistics, dynamic pricing, and international market recoveries [8]. - **RTX (RTX)** has benefited from elevated global defense budgets and operational efficiencies, leading to organic growth and strong free cash flow [9]. - **Broadcom (AVGO)** combines semiconductor products with a growing software portfolio, resulting in steady hardware revenue and high-margin software income [10]. - **Nvidia (NVDA)** continues to dominate in AI and gaming, with strong demand for its data-center GPUs driven by the adoption of generative AI workloads [11]. - **Goldman Sachs (GS)** has outperformed peers due to stronger investment banking activity and effective capital management, enhancing profitability [12]. - **Philip Morris International (PM)** is transitioning towards smoke-free products, with strong demand for its heated tobacco and vaping products driving growth [13]. Group 2: Key Themes - The companies share common themes of leadership in structural growth markets such as AI compute, cloud, aerospace/defense, and mobile monetization [16]. - There is a notable shift towards recurring, higher-margin revenues in software and services, enhancing cash generation for buybacks and debt reduction [16]. - Operational improvements and disciplined capital allocation have reduced execution risk and supported multiple expansions across these companies [16].