With a Solid 2026 Outlook, Is It Time to Buy Philip Morris International?

Core Viewpoint - Philip Morris International's stock has shown strong performance in 2026, increasing over 13% year to date, highlighting its status as a leading consumer staples stock despite modest gains post-Q4 earnings report [1] Group 1: Q4 Results - The smoke-free portfolio significantly contributed to Q4 results, with shipments of the nicotine pouch brand Zyn increasing by 18% year over year and U.S. shipments rising by 20% [2] - Sales volumes of heated tobacco units (HTUs), including the Iqos system, grew by 7.5% to 39.4 billion units, with strong growth observed in Japan and Europe, and increasing uptake in major cities outside these regions [2] - Traditional cigarette volumes declined by 2.2% to 149.4 billion units [2] - Organic revenue rose by 3.7% year over year to $10.4 billion, while overall revenue increased by 6.8% [3] - Adjusted earnings per share (EPS) grew by 9.4% to $1.70 [3] Group 2: Future Outlook - The company forecasts organic revenue growth of 5% to 7% and anticipates total industry cigarette and HTU volumes (excluding China and the U.S.) to decline by around 2% [4] - Cigarette volumes are expected to decrease by 3%, impacted by increased excise taxes in Mexico and India, although a recovery is anticipated in Turkey [4] - Smoke-free portfolio volumes are projected to rise by high single digits [4] - Adjusted EPS is projected to be between $8.38 and $8.53, reflecting growth of 11% to 13%, with an adjusted EPS growth of 7.5% to 9.5% expected, resulting in a range of $8.11 to $8.26 [5] - The company anticipates generating $45 billion in operating cash flow over the next three years, with growth expected to accelerate in 2027 due to the end of taxation equalization in Japan for HTUs and the introduction of Iqos in the U.S. pending regulatory approval [6]