PMI(US:PM) The Motley Fool·2025-12-11 21:35Core Viewpoint - Philip Morris International is positioned to expand its leadership in the tobacco industry, particularly in the smoke-free product segment, with significant growth potential in the U.S. market [1][2][10] Company Overview - Philip Morris has seen a strong performance in 2023, with shares up over 24% since January despite a 20% drop from its peak [1] - The company has successfully transitioned towards smoke-free alternatives, with these products now accounting for 41% of its revenue [3] Product Development - Philip Morris was an early entrant in the heat-not-burn market with its Iqos device and has strengthened its portfolio by acquiring Swedish Match, which owns the popular Zyn brand [3][5] - The company is awaiting FDA approval for its latest heat-not-burn device, Iqos Iluma, which could significantly enhance its market presence in the U.S. [7][8] Market Opportunity - The U.S. market represents a substantial growth opportunity, with Altria's smokeable product sales reaching $21.2 billion last year [6] - Philip Morris has a 72% success rate in converting traditional smokers to its Iqos product, indicating strong potential for market penetration [6] Sales Performance - Zyn brand sales have surged, with 204.9 million cans sold in the U.S. during the third quarter, marking a 37% increase year-over-year [9] - A successful launch of Iqos Iluma could further boost Zyn's growth and overall market share for Philip Morris in the U.S. [9][10] Financial Outlook - Philip Morris is viewed as a strong dividend stock, currently yielding 4%, with analysts projecting an annualized earnings growth rate of 11% over the long term [10]