Philip Morris: Strong Fundamentals but Growing Competitive and Regulatory Headwinds Justify Hold Rating

Jefferies analyst Andrei Andon Ionita downgraded the rating on Philip Morris to a Hold today, setting a price target of $180.00.

Andrei Andon Ionita has given his Hold rating due to a combination of factors that temper the otherwise strong fundamental profile of Philip Morris. He still views the company as a high-quality name in global tobacco, underpinned by premium cigarette brands, exposure to slower‑declining emerging markets, and leadership in next‑generation products such as heated tobacco and oral nicotine pouches. However, he now expects slower earnings growth than previously forecast, driven by a deceleration in U.S. nicotine pouch expansion and rising competitive pressure in heated tobacco, which constrains the likelihood of further valuation multiple expansion in the near term.
At the category level, he flags that U.S. oral nicotine pouches, while still growing rapidly, are seeing a stronger challenge from BAT, which is capturing a disproportionate share of incremental growth and could benefit further if U.S. regulatory fast‑track approval favors its Velo brand. In Japan, he anticipates softer heated‑tobacco volumes as tax increases take effect and Japan Tobacco’s new Ploom AURA device gains traction, contributing to market‑share erosion for Philip Morris. Given these headwinds, his revised 2026 earnings estimates fall slightly below consensus, and with the stock already trading at a historically elevated price‑earnings multiple, he judges the upside to be limited, justifying a Hold rating and a reduced target price.

In another report released on January 16, TipRanks – OpenAI also reiterated a Hold rating on the stock with a $187.00 price target.