Core Insights - Philip Morris International (PM) is leveraging its ILUMA platform to sustain momentum in its heated tobacco unit (HTU) through the latter half of 2025, with adjusted in-market sales growth for HTUs reaching 11.4% in Q2 2025 [1][7] - The company has expanded ILUMA into over 30 markets, significantly enhancing market share and user adoption, particularly in Europe and Japan [2][3] Sales and Market Performance - In Q2 2025, HTU sales increased by 11.4%, with Europe growing by 9.1% and Japan by 7.8%, attributed to the rollout of ILUMA i and new consumable products [1][7] - ILUMA's expansion has led to an increase in IQOS HTU market share by 1.2 percentage points to 10.9% in Europe, with over 20% share in key cities across 12 markets [2][7] Future Growth Projections - PMI anticipates smoke-free product volume growth of 12-14% in 2025, with the ILUMA upgrade cycle expected to support continued double-digit HTU growth [3] - The second half of 2025 will focus on maintaining rollout momentum while navigating competitive and regulatory challenges [3] Competitive Landscape - Turning Point Brands reported a significant increase in Modern Oral sales, reaching $30.1 million, and raised its revenue target for 2025 to $100-$110 million, emphasizing flavor innovation and retail presence [4] Valuation and Earnings Estimates - Philip Morris shares have decreased by 5.7% over the past month, contrasting with the industry's growth of 1.3% [5] - The forward price-to-earnings ratio for PM is 21.17X, higher than the industry average of 15.36X [8] - The Zacks Consensus Estimate for PM's earnings per share for 2025 and 2026 has increased by 4 cents and 7 cents, respectively, to $7.49 and $8.39 [9]

Investment Rating - The industry investment rating is "Positive" and maintained [6] Core Insights - Philip Morris International (PMI) reported Q1 2025 revenue of $9.3 billion, a year-on-year increase of 5.8% (10.2% adjusted) [3][4] - Revenue from smoke-free tobacco products reached $3.9 billion in Q1 2025, growing by 15.0% (20.4% adjusted), with its revenue share increasing to 42% from 39% in Q1 2024 [3][4] Summary by Sections Company Performance - PMI's heated tobacco unit (HTU) shipment volume reached 37.1 billion sticks in Q1 2025, an increase of 11.9%, with global market share for HNB products rising to 77% [9] - The number of IQOS users reached 32.2 million by the end of 2024, an increase of 3.6 million [9] Market Insights - In Japan, IQOS market share increased by 3.0 percentage points to 32.2% in Q1 2025 [9] - In Europe, IQOS products saw approximately 7.4% growth in Q1 2025, with market share in the EU rising by 1.2 percentage points to 11.4% [9] Product Growth - Nicotine pouch sales grew rapidly, with a shipment increase of 27.2% in Q1 2025, and the U.S. market saw a 53% increase in shipments [9] - PMI expects smoke-free product sales to grow by 12%-14% in 2025, with HTU products projected to grow by 10%-12% [9] Investment Opportunities - Recommended companies to watch include Yingqu Technology, Smoore International, and nicotine pouch-related companies due to the industry's growth potential [9]