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Tobacco companies are creating quite a steer, splitting investors into groups on Seeking Alpha. First group argues, the decline in smoking and younger, more health-conscious generations are clearly a warning sign to stay away from big tobacco as failure to hook-up youngstersI’m a Financial Analyst at a Fortune 500 company, investing with a long runway—30 years to retirement and plenty of compounding ahead. I write about building a thoughtful portfolio that balances strong growth potential with solid fundame ...

Core Insights - Philip Morris International Inc. (PM) has successfully transitioned towards reduced-risk products (RRPs), particularly through its IQOS platform, positioning itself as a leader in the tobacco industry for the future [1] - Despite a strong performance in the first half of 2025, concerns regarding PM's valuation have emerged, with a forward P/E ratio of 22.89x, significantly higher than its five-year average of 15.34x and the broader industry average of 15.36x [2][10] - The company's revenue growth is steady but not exceptional, facing challenges such as currency fluctuations, regulatory pressures, and geopolitical uncertainties [3] Valuation and Performance - PM's current valuation reflects strong bullish sentiment about its smoke-free future, but much of this optimism appears to be already priced in, leading to a Value Score of C, indicating less attractiveness from a valuation perspective [2] - Year-to-date, PM shares have increased by 50.1%, outperforming the industry growth of 37.6% [8] Earnings Estimates - The Zacks Consensus Estimate for PM's 2025 earnings indicates a year-over-year growth of 13.7%, while the estimate for 2026 suggests an 11.7% increase [12] - Current earnings estimates for 2025 and 2026 have remained unchanged over the past 30 days, with the current year estimate at $7.47 billion and the next year at $8.34 billion [12] Competitor Analysis - Altria Group, Inc. (MO) is trading at a P/E ratio of 10.76x, demonstrating resilience through strong pricing power and a focus on smoke-free products [6] - British American Tobacco p.l.c. (BTI) is trading at 10.33x and aims to have 50 million users of non-combustible products by 2030, targeting 50% of its revenues from these products by 2035 [7]

Key Takeaways Stocks making new highs tend to make even higher highs. Both PM and STRL shares have benefited from strong quarterly results. Both companies' near-term outlooks allude to further gains. When stocks are cruising near all-time or 52-week highs, it reflects considerable bullishness with trends where buyers are in control. Stocks making new highs tend to make even higher highs, particularly when analysts' positive earnings estimate revisions are present.   That’s been precisely the case for Phil ...

Core Insights - Philip Morris International (PM) relies heavily on pricing as a primary driver for earnings, achieving a 12.7% year-over-year increase in adjusted earnings per share (EPS) to $1.69 in Q1 2025, with pricing contributing 6 percentage points to organic revenue growth of 10.2% [1][7] - The company has raised its full-year EPS forecast to a range of $7.36-$7.49, raising questions about the sustainability of this momentum solely through pricing [1] Pricing Strategy and Market Performance - Continued pricing strength was noted in key markets such as Turkey, Poland, and Germany, although gross pricing is expected to moderate for the remainder of the year [2] - In the smoke-free category, gross margins expanded by 670 basis points, exceeding 70%, with ZYN shipments increasing by 63% in the quarter, highlighting the segment's strategic importance [2][3] Competitive Landscape - Altria Group (MO) reported a 10.8% increase in net price realization for combustibles, but faces challenges with consumer pressure leading to a shift towards discount brands [4] - Turning Point Brands (TPB) experienced significant growth in its modern oral segment, but faced margin pressure and acknowledged the need for further investment to enhance profitability [5] Valuation and Earnings Estimates - Philip Morris shares have increased by 4.9% over the past month, slightly underperforming the industry growth of 5.1% [6] - The forward price-to-earnings ratio for PM is 23.19X, compared to the industry average of 15.64X, indicating a premium valuation [8] - The Zacks Consensus Estimate for PM's 2025 earnings suggests a year-over-year growth of 13.7%, with an 11.7% increase projected for 2026 [9]

Core Insights - Philip Morris International Inc. is transitioning towards becoming a 100% smoke-free products company, with smoke-free products currently accounting for 42% of its overall revenue as of March 31, 2025 [2]. Group 1: Company Overview - Philip Morris International Inc. is a US-based multinational tobacco company that produces cigarettes and a variety of smoke-free products, including e-vapor, heated tobacco, and oral smokeless products [2]. - The company is focusing on developing and commercializing oral and inhaled consumer health and wellness products, as well as inhaled prescription products for cardiovascular emergencies and pain management [3]. Group 2: Technology and Innovation - The report provides insights into Philip Morris' tech activities, including digital transformation strategies, innovation programs, and technology initiatives [1][4]. - Key technology initiatives include partnerships and product launches, with a focus on technology themes, objectives, and benefits [6]. - The company has established a venture arm, PM Equity Partner, to support its technology initiatives [6]. Group 3: Financial Insights - The report includes details of estimated ICT budgets and contracts, providing insights into Philip Morris' tech operations and strategies [6].

Core Insights - Philip Morris International is transitioning from a traditional cigarette manufacturer to a more diverse brand focusing on smoke-free products, particularly the Zyn oral nicotine pouch [2][8] - The company has shown steady earnings growth, with EPS increasing by 14%, 14%, and 13% year-over-year over the past three quarters [3] - Philip Morris has consistently outperformed Wall Street expectations, beating analyst estimates in 19 of the last 20 quarters [6] Company Overview - Philip Morris International operates in over 180 countries and was spun off from the Altria Group in 2008 [1] - The company is known for its premium cigarette brands, including Marlboro, Parliament, and Virginia Slim [1] Smoke-Free Business Growth - Zyn has captured approximately 75% of the tobacco pouch market, driven by its popularity on social media and appeal to younger consumers [2] - Shipments of Zyn have increased more than fivefold over the past five years, with continued growth anticipated [2] Financial Performance - Philip Morris has demonstrated consistent annual earnings growth over the past three years [3] - The company has a low cost structure and a healthy cash reserve, supporting future growth [7] Stock Performance - The stock has a beta of 0.14, indicating lower volatility compared to the S&P 500, while outperforming over 95% of S&P 500 stocks [4] - Consensus estimates suggest double-digit EPS growth into 2026, indicating positive future performance for shareholders [7]

Key Takeaways PM's smoke-free products made up 44% of Q1 gross profit, led by IQOS and ZYN shipments. ZYN shipments soared 53% in Q1, with PM raising 2025 shipment guidance to 800-840 million cans. PM's smoke-free gross margin topped 70%, far exceeding combustibles, with products in 95 markets.Philip Morris International Inc. (PM) is accelerating its shift from traditional tobacco to reduced-risk products, with strong momentum in its flagship offerings — IQOS and ZYN. In the first quarter of 2025, smoke-f ...

Core Insights - Philip Morris International Inc. (PM) has seen a stock increase of 50.1% year to date, outperforming the Zacks Tobacco industry's 38.8% rise and the 7% growth of the Zacks Consumer Staples sector, while the S&P 500 has only increased by 0.9% [1][2][9] Performance Comparison - PM has outperformed competitors such as Altria Group, British American Tobacco, and Turning Point Brands, which have seen returns of 13.4%, 27.1%, and 24.7% respectively year to date [2] Factors Behind Growth - The surge in PM's stock is attributed to premium pricing in traditional tobacco, rapid expansion in smoke-free offerings, and tight cost controls [5] - As of June 4, 2025, PM's stock closed at $180.66, just 1.8% below its 52-week high, indicating potential for further growth [6] - PM's stock is trading above both its 50-day and 200-day moving averages, reflecting sustained upward momentum and investor confidence [7] Smoke-Free Business Expansion - Smoke-free net revenues increased by 20.4% in Q1 2025, driven by the expansion of IQOS, ZYN, and VEEV [9][10] - IQOS, PM's flagship product, saw a 9.4% growth in HTU-adjusted IMS, particularly in Japan and Europe, while ZYN shipments surged 53% to 202 million cans [11][12] - PM is now active in 95 markets with smoke-free offerings, confirming the effectiveness of its multi-category strategy [12] Traditional Tobacco Performance - PM's combustible tobacco business remains resilient, with flat reported net revenues but a 3.8% increase on an organic basis in Q1 2025 [13] - The company's global brand portfolio, led by Marlboro, gained market share, increasing PM's total cigarette category share by 0.4 percentage points to 24.8% [13] Financial Outlook - PM expects total volume growth of 2% in 2025, marking its fifth consecutive year of positive volume growth, with smoke-free products projected to grow by 12-14% [14] - Management forecasts net revenue growth of 6-8% on an organic basis, with adjusted EPS for 2025 expected to be between $7.36 and $7.49, indicating 12-14% growth from the previous year [15] Earnings Estimates - The Zacks Consensus Estimate for PM's 2025 earnings suggests a year-over-year growth of 13.7%, with the same for 2026 indicating an 11.7% increase [18] - For Q2 2025, adjusted EPS is projected to be between $1.80 and $1.85, reflecting year-over-year growth [17] Valuation Insights - PM is currently trading at a forward P/E ratio of 23.04, significantly above the tobacco industry average of 15.49, indicating strong investor confidence in its growth trajectory [20] - Compared to peers, PM commands a premium valuation, reflecting a market perception of it as a growth-oriented company within the tobacco industry [21][22] Conclusion - PM is positioned as a leader in the shift toward reduced-risk products, with strong pricing power, accelerating smoke-free growth, and consistent earnings momentum, making it an attractive long-term investment opportunity [24][25]

Core Insights - Philip Morris International Inc. (PM) is undergoing a significant transformation towards reduced-risk products, with smoke-free products contributing to 44% of total gross profit in Q1 2025 [1][9]. Group 1: Business Transformation - The company's multi-category strategy includes products like IQOS, ZYN, and VEEV, with IQOS showing a 9.4% HTU-adjusted IMS growth in Q1 despite regulatory challenges in Europe [2]. - ZYN's shipments in the U.S. surged by 53% year-over-year, reaching 202 million cans, prompting an increase in the full-year shipment forecast to 800-840 million cans [2][9]. - VEEV's shipment volumes more than doubled in the quarter, benefiting from expanded distribution in Europe [3]. Group 2: Financial Performance - The smoke-free segment experienced a 20.4% increase in net revenues and a 33.1% rise in gross profit, with gross margins exceeding 70% [3][9]. - PM's smoke-free products are now available in 95 markets, with nearly 38.6 million adult users globally [4][9]. Group 3: Competitive Landscape - Altria Group is focusing on building a smoke-free portfolio, with its on! nicotine pouch seeing an 18% year-over-year growth in shipments [6]. - British American Tobacco aims to reach 50 million consumers of smokeless products by 2030, with New Category revenues rising 2.5% in 2024 [7]. Group 4: Stock Performance and Valuation - PM's shares have increased by 51.4% year-to-date, outperforming the industry's growth of 38.5% [8]. - The company trades at a forward price-to-earnings ratio of 23.27X, above the industry's average of 15.46X [11]. - The Zacks Consensus Estimate for PM's 2025 earnings indicates a year-over-year growth of 13.7% [12].