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Philip Morris Stock Records 50% YTD Surge: Is it Too Late to Buy?
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Key Takeaways
PM outperforms peers with a 50.1% YTD gain, far ahead of the sector and the broader market.
Smoke-free net revenues rose 20.4% in Q1, driven by IQOS, ZYN and VEEV expansion across key markets.
PM projects 2025 adjusted EPS of $7.36-$7.49, reflecting 12-14% growth and strong operational efficiency.
Philip Morris International Inc. (PM - Free Report) is making waves in 2025 with the stock jumping 50.1% year to date, outpacing the Zacks Tobacco industry’s 38.8% rise and significantly outperforming 7% growth of the Zacks Consumer Staples sector. By comparison, the S&P 500 has barely moved, with just a 0.9% increase. The scale of PM’s rally has sparked growing investor interest.
Philip Morris has also outshone its competitors like Altria Group, Inc. (MO - Free Report) , British American Tobacco p.l.c. (BTI - Free Report) and Turning Point Brands (TPB - Free Report) during this time. Altria has returned 13.4%, British American Tobacco is up 27.1%, and Turning Point Brands has gained 24.7% year to date.
PM’s YTD Price Performance
Image Source: Zacks Investment Research
What’s Behind PM’s YTD Surge?
The answer lies in a powerful combination of premium pricing in traditional tobacco, rapid expansion in smoke-free offerings and tight cost controls. As Philip Morris transitions from a cigarette heavyweight to a reduced-risk powerhouse, many are now wondering if the stock has more room to run.
As of June 4, 2025, Philip Morris stock closed at $180.66, 1.8% below its 52-week high of $183.94 reached a day earlier. This proximity to its peak suggests continued upside potential, especially given the company’s strong fundamentals.
Adding to the bullish case, Philip Morris trades above both its 50-day and 200-day simple moving averages — a signal of sustained upward momentum and investor confidence. This technical strength reflects not only positive market sentiment but also belief in the company’s ability to deliver long-term value through its strategic transformation.
PM Stock Trades Above 50 and 200-Day Moving Average
Image Source: Zacks Investment Research
PM’s Smoke-Free Gains Are Accelerating
Philip Morris’ real growth engine lies in its smoke-free business, which is scaling rapidly. Smoke-free net revenues jumped 20.4% in first-quarter 2025, and gross profit rose by a striking 33.1%. This translated into a gross margin of over 70%, more than 500 basis points higher than combustibles. The result is a business that is not just growing faster but is also more profitable.
IQOS, PM’s flagship heat-not-burn product, posted 9.4% HTU-adjusted IMS growth, especially in Japan and Europe. Meanwhile, ZYN, the nicotine pouch acquired via Swedish Match, continues to dominate the U.S. market. In the first quarter, ZYN shipments surged 53% to 202 million cans, surpassing expectations. With demand outpacing supply, PM recently upgraded its 2025 ZYN shipment forecast to 800-840 million cans from 780-820 million previously.
In addition to IQOS and ZYN, e-vapor brand VEEV also saw volumes more than double, buoyed by pod growth in Europe. Combined, all three smoke-free categories are contributing to a broader transformation. Philip Morris is now active in 95 markets with smoke-free offerings, and 46 markets feature more than one product category. Early momentum in markets like the U.K., Italy, and the Czech Republic confirms that the multi-category strategy is working.
PM’s Combustible Tobacco Remains a Steady Performer
While Philip Morris is accelerating its shift toward smoke-free products, its traditional combustible tobacco business continues to show resilience. In the first quarter of 2025, strong pricing and modest volume growth helped offset a negative geographic mix, resulting in flat reported net revenues but a 3.8% increase on an organic basis. Gross profit remained solid, rising 2% year over year (5.3% organically), highlighting the segment’s profitability. Notably, the company’s global brand portfolio, led by Marlboro, gained additional market share, pushing Philip Morris’ total cigarette category share up by 0.4 percentage points to 24.8%.
PM’s Upbeat Outlook Indicates Strength
Philip Morris is positioning itself for another strong year in 2025, backed by solid financial performance and accelerating momentum in its smoke-free portfolio. The company expects total volumes to grow 2%, marking its fifth straight year of positive volume growth. Smoke-free products are projected to remain the primary growth engine, with volume growth of 12-14%, underscoring Philip Morris’ ongoing shift toward reduced-risk alternatives.
On the financial front, management forecasts net revenue growth of 6-8% on an organic basis, signaling strong consumer demand and operational efficiency during the year. Philip Morris expects adjusted earnings per share (EPS) for 2025 in the range of $7.36 to $7.49, which implies 12-14% growth from the prior year. Even excluding currency impacts, adjusted EPS is forecasted in the range of $7.26 to $7.39, indicating solid earnings momentum with growth between 10.5% and 12.5%. For the second quarter of 2025, Philip Morris envisions adjusted EPS in the range of $1.80-$1.85, also indicating year-over-year growth.
Bullish Earnings Estimates for Philip Morris
The Zacks Consensus Estimate for PM’s 2025 earnings implies year-over-year growth of 13.7%, whereas the same for 2026 suggests a year-over-year uptick of 11.7%. The estimates for 2025 and 2026 have remained unchanged in the past 30 days. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
The Zacks Consensus Estimate for Philip Morris’ second-quarter 2025 EPS suggests year-over-year growth of 15.7%, highlighting optimism over the company’s near-term prospects.
Image Source: Zacks Investment Research
Does PM’s P/E Signal Confidence or Overvaluation?
Philip Morris is currently trading at a forward price-to-earnings (P/E) ratio of 23.04, well above the tobacco industry average of 15.49. This higher valuation underscores investor confidence in the company’s long-term growth trajectory, particularly as it accelerates its shift toward smoke-free alternatives like IQOS and ZYN.
Compared to its peers, Philip Morris commands a premium. Turning Point Brands trades at a forward P/E of 21.03, while Altria and British American Tobacco lag behind with P/E ratios of 10.87 and 9.84, respectively.
This valuation gap reflects a broader trend — investors are increasingly willing to pay a premium for tobacco companies that are investing in innovation and expanding their footprint in reduced-risk product categories. In Philip Morris’ case, the elevated multiple highlights the market’s view of the company as a growth-driven, future-ready player within a traditionally defensive industry.
Image Source: Zacks Investment Research
Final Take on PM
Philip Morris has proven it’s more than just a legacy tobacco company — it’s a forward-thinking leader in the global shift toward reduced-risk products. With strong pricing power, accelerating smoke-free growth, and consistent earnings momentum, the company is well-positioned for long-term success. Trading near its highs and outperforming its peers, PM’s stock reflects confidence that’s backed by fundamentals. For investors seeking a combination of growth, resilience and innovation in this space, Philip Morris appears to be a smart and rewarding long-term bet.
Image: Bigstock
Philip Morris Stock Records 50% YTD Surge: Is it Too Late to Buy?
Key Takeaways
Philip Morris International Inc. (PM - Free Report) is making waves in 2025 with the stock jumping 50.1% year to date, outpacing the Zacks Tobacco industry’s 38.8% rise and significantly outperforming 7% growth of the Zacks Consumer Staples sector. By comparison, the S&P 500 has barely moved, with just a 0.9% increase. The scale of PM’s rally has sparked growing investor interest.
Philip Morris has also outshone its competitors like Altria Group, Inc. (MO - Free Report) , British American Tobacco p.l.c. (BTI - Free Report) and Turning Point Brands (TPB - Free Report) during this time. Altria has returned 13.4%, British American Tobacco is up 27.1%, and Turning Point Brands has gained 24.7% year to date.
PM’s YTD Price Performance
Image Source: Zacks Investment Research
What’s Behind PM’s YTD Surge?
The answer lies in a powerful combination of premium pricing in traditional tobacco, rapid expansion in smoke-free offerings and tight cost controls. As Philip Morris transitions from a cigarette heavyweight to a reduced-risk powerhouse, many are now wondering if the stock has more room to run.
As of June 4, 2025, Philip Morris stock closed at $180.66, 1.8% below its 52-week high of $183.94 reached a day earlier. This proximity to its peak suggests continued upside potential, especially given the company’s strong fundamentals.
Adding to the bullish case, Philip Morris trades above both its 50-day and 200-day simple moving averages — a signal of sustained upward momentum and investor confidence. This technical strength reflects not only positive market sentiment but also belief in the company’s ability to deliver long-term value through its strategic transformation.
PM Stock Trades Above 50 and 200-Day Moving Average
Image Source: Zacks Investment Research
PM’s Smoke-Free Gains Are Accelerating
Philip Morris’ real growth engine lies in its smoke-free business, which is scaling rapidly. Smoke-free net revenues jumped 20.4% in first-quarter 2025, and gross profit rose by a striking 33.1%. This translated into a gross margin of over 70%, more than 500 basis points higher than combustibles. The result is a business that is not just growing faster but is also more profitable.
IQOS, PM’s flagship heat-not-burn product, posted 9.4% HTU-adjusted IMS growth, especially in Japan and Europe. Meanwhile, ZYN, the nicotine pouch acquired via Swedish Match, continues to dominate the U.S. market. In the first quarter, ZYN shipments surged 53% to 202 million cans, surpassing expectations. With demand outpacing supply, PM recently upgraded its 2025 ZYN shipment forecast to 800-840 million cans from 780-820 million previously.
In addition to IQOS and ZYN, e-vapor brand VEEV also saw volumes more than double, buoyed by pod growth in Europe. Combined, all three smoke-free categories are contributing to a broader transformation. Philip Morris is now active in 95 markets with smoke-free offerings, and 46 markets feature more than one product category. Early momentum in markets like the U.K., Italy, and the Czech Republic confirms that the multi-category strategy is working.
PM’s Combustible Tobacco Remains a Steady Performer
While Philip Morris is accelerating its shift toward smoke-free products, its traditional combustible tobacco business continues to show resilience. In the first quarter of 2025, strong pricing and modest volume growth helped offset a negative geographic mix, resulting in flat reported net revenues but a 3.8% increase on an organic basis. Gross profit remained solid, rising 2% year over year (5.3% organically), highlighting the segment’s profitability. Notably, the company’s global brand portfolio, led by Marlboro, gained additional market share, pushing Philip Morris’ total cigarette category share up by 0.4 percentage points to 24.8%.
PM’s Upbeat Outlook Indicates Strength
Philip Morris is positioning itself for another strong year in 2025, backed by solid financial performance and accelerating momentum in its smoke-free portfolio. The company expects total volumes to grow 2%, marking its fifth straight year of positive volume growth. Smoke-free products are projected to remain the primary growth engine, with volume growth of 12-14%, underscoring Philip Morris’ ongoing shift toward reduced-risk alternatives.
On the financial front, management forecasts net revenue growth of 6-8% on an organic basis, signaling strong consumer demand and operational efficiency during the year. Philip Morris expects adjusted earnings per share (EPS) for 2025 in the range of $7.36 to $7.49, which implies 12-14% growth from the prior year. Even excluding currency impacts, adjusted EPS is forecasted in the range of $7.26 to $7.39, indicating solid earnings momentum with growth between 10.5% and 12.5%. For the second quarter of 2025, Philip Morris envisions adjusted EPS in the range of $1.80-$1.85, also indicating year-over-year growth.
Bullish Earnings Estimates for Philip Morris
The Zacks Consensus Estimate for PM’s 2025 earnings implies year-over-year growth of 13.7%, whereas the same for 2026 suggests a year-over-year uptick of 11.7%. The estimates for 2025 and 2026 have remained unchanged in the past 30 days. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)
The Zacks Consensus Estimate for Philip Morris’ second-quarter 2025 EPS suggests year-over-year growth of 15.7%, highlighting optimism over the company’s near-term prospects.
Image Source: Zacks Investment Research
Does PM’s P/E Signal Confidence or Overvaluation?
Philip Morris is currently trading at a forward price-to-earnings (P/E) ratio of 23.04, well above the tobacco industry average of 15.49. This higher valuation underscores investor confidence in the company’s long-term growth trajectory, particularly as it accelerates its shift toward smoke-free alternatives like IQOS and ZYN.
Compared to its peers, Philip Morris commands a premium. Turning Point Brands trades at a forward P/E of 21.03, while Altria and British American Tobacco lag behind with P/E ratios of 10.87 and 9.84, respectively.
This valuation gap reflects a broader trend — investors are increasingly willing to pay a premium for tobacco companies that are investing in innovation and expanding their footprint in reduced-risk product categories. In Philip Morris’ case, the elevated multiple highlights the market’s view of the company as a growth-driven, future-ready player within a traditionally defensive industry.
Image Source: Zacks Investment Research
Final Take on PM
Philip Morris has proven it’s more than just a legacy tobacco company — it’s a forward-thinking leader in the global shift toward reduced-risk products. With strong pricing power, accelerating smoke-free growth, and consistent earnings momentum, the company is well-positioned for long-term success. Trading near its highs and outperforming its peers, PM’s stock reflects confidence that’s backed by fundamentals. For investors seeking a combination of growth, resilience and innovation in this space, Philip Morris appears to be a smart and rewarding long-term bet.
At present, PM carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.