Shares of Philip Morris International (PM) rose over 4% on Tuesday after the company reported stronger-than-expected 2Q earnings. The company’s CEO, André Calantzopoulos, stated that “despite a very challenging quarter due to the pandemic, Philip Morris delivered results above management’s expectations both on the net revenues and EPS front.”
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Phillip Morris’ adjusted earnings of $1.29 per share fell 11.6% year-over-year. However, it came well ahead of analysts’ estimates of $1.10. Its revenues of $6.7 billion beat analysts’ expectations of $6.5 billion but declined 13.6% year-over-year due to lower cigarette shipment volumes.
IQOS continued to perform well, reflecting market share gains and growth in user acquisition. At the end of the quarter, total IQOS users stood at approximately 15.4 million, of which nearly 11.2 million have quit smoking and switched to IQOS. Earlier this month, the U.S. Food and Drug Administration (FDA) allowed the marketing of IQOS tobacco heating system as a modified risk tobacco product, unlike cigarettes.
Philip Morris expects to report adjusted earnings of $4.92-$5.07 per share in 2020, implying a constant-currency growth of 2%-5% year-over-year.
Overall, PM analysts have a cautiously optimistic Moderate Buy consensus on the stock. The average analyst price target stands at $80.20, implying 6.2% upside potential. (See Philip Morris’ stock analysis on TipRanks).
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