Stifel Reaffirms Buy Rating on Philip Morris (PM) After Q3 Results

Core Insights - Philip Morris International Inc. (NYSE:PM) is recognized as a strong investment opportunity, particularly for income investors due to its consistent dividend growth and solid financial performance [2][6]. Financial Performance - Stifel reaffirmed a Buy rating on Philip Morris after the company reported strong Q3 results, exceeding expectations in organic sales, profit margins, and earnings per share (EPS) growth [2]. - The company raised the lower end of its 2025 EPS forecast, aided by a reduced tax rate and lower interest expenses, but lowered its operating profit guidance to 10%-11.5% from 11%-12.5% due to increased investments in the U.S. market, particularly for its ZYN nicotine pouch brand [3]. - For Q4, Philip Morris anticipates low to mid-single-digit operating profit growth, slightly below earlier projections, primarily due to inventory challenges with its IQOS and ZYN product lines, estimating a 20-30 million can inventory headwind for ZYN [4]. Stock Performance and Market Sentiment - Despite a nearly 18% decline from its June peak, Stifel views this drop as a buying opportunity, asserting that the expected Q4 softness does not reflect the company's underlying earnings momentum [5]. - The company is projected to achieve EPS growth consistent with its medium-term target range of 9-11% heading into 2026 [5]. Dividend Information - Philip Morris has a strong track record of rewarding shareholders with growing dividends for 16 consecutive years, currently offering a quarterly dividend of $1.47 per share and a dividend yield of 3.87% as of October 21 [6].