Record Earnings: Should Investors Buy Philip Morris Stock Now?

Core Viewpoint - Philip Morris International has demonstrated strong stock performance recently, driven by a successful pivot towards smokeless products, particularly Zyn nicotine pouches, resulting in record quarterly earnings and renewed interest from institutional investors [1][2][5]. Financial Performance - Philip Morris reported quarterly sales of $9.9 billion, exceeding estimates by 2.3% and reflecting an 8.4% year-on-year increase. Earnings per share reached $1.91, which is 4.9% above estimates and a 14.4% increase year-on-year [1][5]. - The smoke-free business segment accounted for 38% of total net revenues and 40% of gross profit, with net revenues increasing by 14.2% and gross profit by 15.9% year-on-year [3][5]. Stock Performance and Valuation - Following the strong earnings report, Philip Morris stock rose 8%, reaching new all-time highs, while still being considered attractive at current levels due to reasonable valuation and strong growth catalysts [2][6]. - The stock is currently trading at a one-year forward earnings multiple of 18.5x, which is above its 10-year median of 16.5x but below the broader market average, indicating a reasonable valuation in light of anticipated growth [4][6]. Dividend Policy - Management announced a 3.8% increase in the dividend, bringing the yield to 4.5%, which remains appealing for investors seeking income alongside growth potential [5][6]. Competitive Positioning - Among major tobacco companies, Philip Morris is viewed as the most attractive due to its successful adaptation to market changes, particularly with the popularity of Zyn, which saw a 41% increase in shipments year-on-year [3][4]. - Philip Morris has outperformed peers like Altria and British American Tobacco, which continue to trade below their 2017 highs, while Philip Morris is trading at new highs [4][6].