Shares of Philip Morris International (PM) gained in trading after the company reported strong third-quarter results. The tobacco company’s adjusted earnings increased by 14.4% year-over-year to $1.91 per share, which beat analysts’ consensus estimate of $1.82 per share.
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Furthermore, the company’s revenues increased by 8.4% year-over-year to $9.9 billion. This beat analysts’ expectations of $9.7 billion.
PM’s Alternatives to Cigarettes See Surge in Shipments in Q3
Philip Morris has been investing heavily in developing alternatives to traditional cigarettes, responding to a growing shift among health-conscious consumers. These efforts are reflected in the company’s focus on products like the IQOS heated tobacco device and ZYN nicotine pouches.
In the U.S., shipments of ZYN surged by 41.4% year-over-year in the third quarter. This was a strong rebound after supply constraints earlier slowed its rapid growth. In fact, PMI has been investing heavily to expand its production capacity for ZYN to meet the rising demand.
At the same time, PMI’s flagship heated tobacco device, IQOS, showed impressive growth across markets like Japan, Europe, and Indonesia.
PM Raises FY24 Forecast
Looking ahead, management raised its adjusted earnings forecast and now expects adjusted earnings per share to be in the range of $6.45 to $6.51, while organic revenues are likely to rise by 9.5% year-over-year. For reference, analysts were expecting adjusted earnings of $6.41 per share.
Is PM a Good Stock to Buy Now?
Analysts remain bullish about PM stock, with a Strong Buy consensus rating based on a unanimous eight Buys. Over the past year, PM has increased by more than 45%, and the average PM price target of $135.88 implies an upside potential of 14.2% from current levels. These analyst ratings are likely to change following PM’s results today.
