Should Philip Morris Stock Be in Your Portfolio Ahead of Q4 Earnings?

Core Insights - Philip Morris International Inc. (PM) is expected to show growth in both revenue and earnings for Q4 2025, with revenue estimates at approximately $10.4 billion, reflecting a 7.3% increase year-over-year [1][9] - The earnings consensus remains steady at $1.67 per share, indicating a 7.7% increase from the previous year [2][9] Revenue and Earnings Performance - The anticipated revenue growth is supported by the company's shift towards a smoke-free product portfolio, which accounted for over 42% of gross profit in Q3 2025, driven by strong sales of IQOS, ZYN, and VEEV [3][9] - Smoke-free shipment volumes rose by 16.6%, and organic smoke-free revenues increased by 13.9%, indicating a favorable product mix and pricing strategy [4] Margin and Profitability - Pricing discipline and cost efficiencies have been significant contributors to margin expansion, with notable adjusted operating margin growth in Q3, supported by strong gross margins across both smoke-free and combustible categories [5] - Ongoing productivity initiatives and benefits from smoke-free growth are expected to continue supporting profitability, despite high commercial investments [5] Challenges and Headwinds - The company faces challenges from declining combustible cigarette volumes and foreign exchange volatility, with cigarette shipment volumes decreasing at a low-single-digit rate in Q3 [6] - These structural industry pressures are likely to persist into Q4, potentially impacting overall performance [6] Earnings Prediction Model - The current earnings prediction model does not indicate a strong likelihood of an earnings beat for Philip Morris, with an Earnings ESP of 0.00% and a Zacks Rank of 3 [7]