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Philip Morris (PM) Focuses on Transformation, Shifts Headquarters
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Philip Morris International Inc. (PM - Free Report) has been focused on transforming its business and making a greater way for a smoke-free future. The company’s news of repositioning its corporate headquarters from New York to Connecticut also goes in tandem with its transformation process. Incidentally, Philip Morris unveiled the relocation of its headquarters, which is likely to bring nearly 200 jobs in Connecticut, thereby fueling its economy. Notably, the company’s Operations Center will continue to operate in Lausanne, Switzerland.
Anticipated to start operating by summer 2022, the new headquarters in Connecticut is likely to be an ideal location, as it provides an efficient mix of technological knowledge, futuristic approach and broadened ways of problem-solving. These will help Philip Morris work better toward expanding alternatives to cigarettes, alongside coming up with solutions related to respiratory drug delivery and botanicals. Certainly, the company’s solid leadership, and focus on product innovation and community involvement, among other attributes, are likely to aid.
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Philip Morris Focuses on Strengthening RRPs
Serious health hazards due to cigarette smoking have pushed consumers toward low-risk, reduced risk products (RRPs). Philip Morris is progressing well with its business transformation, with 10.8% of shipment volumes and 23.8% of net revenues coming from smoke-free products as of the end of 2020. This keeps the company well placed toward becoming a majority smoke-free company by 2025. Toward this end, the company’s IQOS, a smokeless cigarette, counts amongst one of the leading RRPs in the industry. Continued strength in IQOS acted as a significant upside during the first quarter of 2021,
These next-generation devices are backed by substantial scientific insights and research. The company expects such advanced and high-quality products to aid adult smokers to switch from traditional cigarettes to smoke-free options. In fact, total users of IQOS as of the end of the first quarter were estimated to be about 19.1 million, including roughly 14 million users who have shifted from smoking to IQOS. Management earlier noted that since the onset of the pandemic, the switch from smoking cigarettes to RRPs has been trending positively. Strong growth in IQOS boosted revenues in the RRPs category, which increased 36.5% to $2,122 million in the first quarter. Moreover, heated tobacco unit shipment volumes of 21.7 billion units rose 29.9% year over year. During the quarter, RRPs formed 28% of the company’s total net revenues.
The company expects consistent growth in the heated tobacco category and therefore, has been committed to expanding these products. The company remains on track to achieve its 2021 goal of 90-100 billion shipments of heated tobacco units. Notably, the company launched IQOS 3 DUO in 2019, which is now available in all of its international markets. Philip Morris has started commercializing IQOS VEEV, which is its new e-vapor product. On its first-quarter 2021 earnings call, management also hinted that it is preparing for the rollout of IQOS ILUMA. Among other initiatives, Philip Morris announced a partnership with South Korea’s KT&G in January 2020 to commercialize the latter’s smoke-free products outside the country.
All said, we believe that the abovementioned relocation of the company’s corporate headquarters to Connecticut is likely to accelerate Philip Morris’ progress with business transformation. The Zacks Rank #3 (Hold) company’s shares have rallied 12.9% in the past three months compared with the industry’s rise of 5.1%.
Vector Group (VGR - Free Report) ) has a Zacks Rank #2 (Buy) and its bottom line outpaced the Zacks Consensus Estimate by 53.2% in the trailing four quarters, on average.
Nomad Foods (NOMD - Free Report) has a Zacks Rank #2 and its bottom line outpaced the Zacks Consensus Estimate by 10.3% in the trailing four quarters, on average.
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Philip Morris (PM) Focuses on Transformation, Shifts Headquarters
Philip Morris International Inc. (PM - Free Report) has been focused on transforming its business and making a greater way for a smoke-free future. The company’s news of repositioning its corporate headquarters from New York to Connecticut also goes in tandem with its transformation process. Incidentally, Philip Morris unveiled the relocation of its headquarters, which is likely to bring nearly 200 jobs in Connecticut, thereby fueling its economy. Notably, the company’s Operations Center will continue to operate in Lausanne, Switzerland.
Anticipated to start operating by summer 2022, the new headquarters in Connecticut is likely to be an ideal location, as it provides an efficient mix of technological knowledge, futuristic approach and broadened ways of problem-solving. These will help Philip Morris work better toward expanding alternatives to cigarettes, alongside coming up with solutions related to respiratory drug delivery and botanicals. Certainly, the company’s solid leadership, and focus on product innovation and community involvement, among other attributes, are likely to aid.
Philip Morris Focuses on Strengthening RRPs
Serious health hazards due to cigarette smoking have pushed consumers toward low-risk, reduced risk products (RRPs). Philip Morris is progressing well with its business transformation, with 10.8% of shipment volumes and 23.8% of net revenues coming from smoke-free products as of the end of 2020. This keeps the company well placed toward becoming a majority smoke-free company by 2025. Toward this end, the company’s IQOS, a smokeless cigarette, counts amongst one of the leading RRPs in the industry. Continued strength in IQOS acted as a significant upside during the first quarter of 2021,
These next-generation devices are backed by substantial scientific insights and research. The company expects such advanced and high-quality products to aid adult smokers to switch from traditional cigarettes to smoke-free options. In fact, total users of IQOS as of the end of the first quarter were estimated to be about 19.1 million, including roughly 14 million users who have shifted from smoking to IQOS. Management earlier noted that since the onset of the pandemic, the switch from smoking cigarettes to RRPs has been trending positively. Strong growth in IQOS boosted revenues in the RRPs category, which increased 36.5% to $2,122 million in the first quarter. Moreover, heated tobacco unit shipment volumes of 21.7 billion units rose 29.9% year over year. During the quarter, RRPs formed 28% of the company’s total net revenues.
The company expects consistent growth in the heated tobacco category and therefore, has been committed to expanding these products. The company remains on track to achieve its 2021 goal of 90-100 billion shipments of heated tobacco units. Notably, the company launched IQOS 3 DUO in 2019, which is now available in all of its international markets. Philip Morris has started commercializing IQOS VEEV, which is its new e-vapor product. On its first-quarter 2021 earnings call, management also hinted that it is preparing for the rollout of IQOS ILUMA. Among other initiatives, Philip Morris announced a partnership with South Korea’s KT&G in January 2020 to commercialize the latter’s smoke-free products outside the country.
All said, we believe that the abovementioned relocation of the company’s corporate headquarters to Connecticut is likely to accelerate Philip Morris’ progress with business transformation. The Zacks Rank #3 (Hold) company’s shares have rallied 12.9% in the past three months compared with the industry’s rise of 5.1%.
3 Consumer Staple Stocks You Can’t Miss
Medifast (MED - Free Report) , which currently carries a Zacks Rank #1 (Strong Buy), has a trailing four-quarter earnings surprise of 12.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Vector Group (VGR - Free Report) ) has a Zacks Rank #2 (Buy) and its bottom line outpaced the Zacks Consensus Estimate by 53.2% in the trailing four quarters, on average.
Nomad Foods (NOMD - Free Report) has a Zacks Rank #2 and its bottom line outpaced the Zacks Consensus Estimate by 10.3% in the trailing four quarters, on average.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
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