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Philip Morris (PM)
NYSE:PM
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Philip Morris
(NYSE:PM)67Neutral
Positive Factors
Earnings
Philip Morris International reported strong fourth quarter earnings with 10% constant currency growth and over 7% organic sales growth.
Smoke-free Strategy
PM is making significant progress on its smoke-free strategy with its smoke-free products available in 95 markets driving ~40% of PM’s total revenue and >40% gross profit.
Negative Factors
Supply Constraints
Demand for ZYN continues to exceed management’s expectations with good visibility on supply constraints in the US easing and traction strengthening internationally.
Philip Morris (PM) vs. S&P 500 (SPY)
Market Cap
$246.90B
Dividend Yield3.44%
Average Volume (3M)6.45M
Price to Earnings (P/E)35.1
Beta (1Y)0.17
Revenue Growth7.75%
EPS Growth-9.85%
CountryUS
Employees83,100
SectorConsumer Defensive
Sector Strength73
IndustryTobacco
Share Statistics
EPS (TTM)4.52
Shares Outstanding1,554,857,200
10 Day Avg. Volume7,392,867
30 Day Avg. Volume6,449,771
Financial Highlights & Ratios
PEG Ratio0.90
Price to Book (P/B)N/A
Price to Sales (P/S)6.52
Price to Cash Flow (P/CF)15.40
P/FCF Ratio16.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$157.75Price Target Upside3.01% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering8
Philip Morris Business Overview & Revenue Model
Company DescriptionIncorporated in 1847, the New York-based Philip Morris International, Inc. is a leading tobacco company that manufactures and sells cigarettes, tobacco, nicotine-containing products, smoke-free products and related electronic devices and accessories in over 180 countries. The company's most popular and best selling brand is Marlboro.
How the Company Makes MoneyPhilip Morris International generates revenue primarily through the sale of its tobacco and nicotine products, including combustible cigarettes and its growing portfolio of smoke-free alternatives like heated tobacco products (e.g., IQOS) and e-cigarettes. The company markets these products to adult smokers in various global regions, excluding the United States, and works through a combination of direct sales, distribution agreements, and strategic partnerships. Key revenue streams include the high-volume sales of established cigarette brands, as well as increasing contributions from its innovative smoke-free products. Philip Morris also benefits from strong brand loyalty and pricing power in many of its markets, which supports its profitability. Significant factors contributing to its earnings include the company's investment in research and development for smoke-free technologies, marketing strategies aimed at transitioning adult smokers to reduced-risk products, and regulatory environments that impact product availability and market access.
Philip Morris Financial Statement Overview
Summary
Philip Morris exhibits strong income and cash flow performance with a high gross profit margin and robust cash generation. However, the balance sheet shows significant leverage with negative equity, which poses a risk to financial stability.Income Statement
Philip Morris shows a strong gross profit margin at 63.4% in 2023, indicative of excellent cost management. Net profit margin is also robust at 22.1% for 2023. However, there is a noticeable decline in net income from 2022 to 2023, reflecting a potential issue in profitability despite revenue growth of 10.7% over the same period.75
Positive
Balance Sheet
The balance sheet reveals high leverage with a negative stockholders' equity, posing a risk to financial stability. The debt-to-equity ratio is incalculable due to negative equity, highlighting the company's reliance on debt financing. Although the equity deficit decreased from 2022 to 2023, negative equity remains a concerning aspect for long-term viability.40
Negative
Cash Flow
Philip Morris demonstrates strong cash flow generation with operating cash flow significantly exceeding net income, indicating healthy cash conversion. The free cash flow to net income ratio is favorable, suggesting efficient capital expenditures. Free cash flow shows a 55.1% increase from 2022 to 2023, supporting solid cash flow health.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 37.88B | 35.17B | 31.76B | 31.41B | 28.69B | Gross Profit |
| 24.55B | 22.28B | 20.53B | 21.38B | 19.13B | EBIT |
| 13.40B | 12.70B | 12.54B | 13.08B | 11.72B | EBITDA |
| 15.75B | 13.37B | 13.79B | 14.17B | 12.92B | Net Income Common Stockholders |
| 7.06B | 7.79B | 9.05B | 9.11B | 8.06B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.22B | 3.06B | 3.21B | 4.50B | 7.28B | Total Assets |
| 61.78B | 65.30B | 61.68B | 41.29B | 44.81B | Total Debt |
| 45.70B | 47.91B | 43.12B | 27.81B | 31.54B | Net Debt |
| 41.48B | 44.85B | 39.92B | 23.31B | 24.26B | Total Liabilities |
| 71.65B | 74.75B | 67.99B | 49.50B | 55.45B | Stockholders Equity |
| -19.00M | -11.22B | -8.96B | -10.11B | -12.57B |
| Cash Flow | Free Cash Flow | |||
| 12.22B | 7.88B | 9.73B | 11.22B | 9.21B | Operating Cash Flow |
| 12.22B | 9.20B | 10.80B | 11.97B | 9.81B | Investing Cash Flow |
| -1.09B | -3.60B | -15.68B | -2.36B | -1.15B | Financing Cash Flow |
| -9.48B | -5.58B | 6.16B | -11.98B | -8.50B |
Philip Morris Technical Analysis
Positive
153.14
Price Trends
134.29
Positive
130.26
Positive
119.80
Positive
Market Momentum
6.17
Positive
63.23
Neutral
58.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PM, the sentiment is Positive. The current price of 153.14 is above the 20-day moving average (MA) of 150.65, above the 50-day MA of 134.29, and above the 200-day MA of 119.80, indicating a bullish trend. The MACD of 6.17 indicates Positive momentum. The RSI at 63.23 is Neutral, neither overbought nor oversold. The STOCH value of 58.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PM.
Philip Morris Risk Analysis
Philip Morris disclosed 33 risk factors in its most recent earnings report. Philip Morris reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Philip Morris Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $29.88B | 9.42 | 48.02% | 5.27% | 5.61% | 23.39% | |
72 Outperform | $95.18B | 8.61 | -503.31% | 7.10% | -0.28% | 43.51% | |
72 Outperform | $1.19B | 26.80 | 25.57% | 0.40% | -0.82% | 294.02% | |
67 Neutral | $246.90B | 35.13 | -37142.11% | 3.44% | 7.75% | -9.85% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
62 Neutral | $1.33B | 10.81 | 8.32% | 6.00% | 12.88% | -6.33% | |
61 Neutral | $88.60B | 22.68 | 6.18% | 7.43% | -2.51% | ― |
* Consumer Defensive Sector Average
Performance Comparison
PM
Philip Morris
153.14
66.40
76.55%
MO
Altria Group
55.95
17.78
46.58%
BTI
British American Tobacco
39.68
12.60
46.53%
UVV
Universal
53.10
6.53
14.02%
IMBBY
Imperial Brands
35.61
15.49
76.99%
TPB
Turning Point Brands
67.02
40.22
150.07%
Philip Morris Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 16.92% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive sentiment overall, with significant growth in smoke-free products, strong financial performance, and strategic progress in key markets. Despite some supply challenges and regulatory impacts, the company is confident in its ability to deliver sustainable growth.Highlights
Strong Smoke-Free Growth
Smoke-free products reached almost $15 billion in net revenues in 2024, with 40% of PMI's net revenues in Q4 and around 42% of adjusted gross profit. The company's smoke-free business is growing fast and becoming increasingly profitable.
Record Operating Cash Flow
Philip Morris International achieved record operating cash flow of $12.2 billion, significantly above both initial and most recent forecasts, supported by excellent profit delivery and favorable working capital.
Robust Pricing and Cost Efficiency
Combustible business showed strong performance with plus 8.7% pricing, resulting in double-digit gross profit growth in Q4 2024. Cost efficiency initiatives delivered over $750 million in savings.
ZYN's Market Leadership and FDA Authorization
ZYN continues to be the number one smoke-free brand in the US and received FDA marketing authorization, making it the first and only authorized nicotine pouch brand in the US.
Positive Global Volume Growth
Philip Morris International delivered its fourth consecutive year of positive shipment growth, with a total volume increase of plus 2.9% for 2024.
Lowlights
Supply Challenges in the US
The rapid growth of smoke-free products in the US led to short-term supply challenges, impacting the ability to fully meet existing user demand.
Impact of Regulatory Changes
The EU characterizing flavor ban caused significant disruption, particularly impacting growth in markets like Italy.
Currency Headwinds
Ongoing currency headwinds, notably from the Russian ruble, had an unfavorable impact on the company's financial results.
Company Guidance
During the Philip Morris International fourth quarter 2024 and full-year results conference call, the company provided robust guidance for the fiscal year 2025. Key metrics included an anticipated 10.5% to 12.5% growth in currency neutral adjusted diluted EPS and an operating cash flow target of around $11 billion. The company expects organic net revenue growth of 6% to 8%, driven by smoke-free product growth of 12% to 14%, and predicts a fifth consecutive year of positive volume growth, up to 2%. PMI highlighted continued strong momentum for IQOS, aiming for shipment growth in line with a double-digit trajectory, and projected ZYN volume shipments between 780 to 820 million cans. Despite potential headwinds from currency impacts, PMI remains confident in achieving its 2024-2026 growth targets and advancing its smoke-free transformation strategy.Philip Morris Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
Philip Morris Emphasizes Transition to Smoke-Free Products
Positive
Feb 19, 2025
On February 19, 2025, PMI’s CEO Jacek Olczak and CFO Emmanuel Babeau addressed investors at the Consumer Analyst Group of New York Conference, emphasizing the company’s transition towards smoke-free products. The presentation highlighted PMI’s strategic focus on delivering superior returns to shareholders, expanding its presence in smoke-free markets, and achieving significant growth in smoke-free net revenues, aiming for $15 billion and entering over 100 markets by 2024. While PMI has faced challenges such as regulatory restrictions and economic uncertainties, the company remains optimistic about its future growth and industry positioning through continued innovation and market expansion.
Business Operations and StrategyFinancial Disclosures
Philip Morris Reaffirms 2025 Earnings Growth Forecast
Positive
Feb 19, 2025
On February 19, 2025, Philip Morris International reaffirmed its full-year forecast at the Consumer Analyst Group of New York Conference, projecting an adjusted diluted EPS growth of 7.2% to 9.1% compared to 2024. PMI highlighted its decade-long progress towards smoke-free products and shared strategies for delivering superior shareholder returns, signaling strong industry positioning and a commitment to innovation.
DividendsBusiness Operations and Strategy
Philip Morris Announces Regular Quarterly Dividend
Positive
Dec 12, 2024
On December 12, 2024, Philip Morris International announced a regular quarterly dividend of $1.35 per common share, payable on January 13, 2025, highlighting its steady financial performance. This announcement reflects PMI’s strong market positioning and commitment to shareholders as it continues to expand its smoke-free product offerings and invest in innovative solutions for a healthier future.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.