Philip Morris (PM) AI Stock Analysis

• Market Cap: $235.29B
• Dividend Yield: 3.54%
• Average Volume (3M): 6.93M
• Price to Earnings (P/E): 33.4
• Beta (1Y): 0.20
• Revenue Growth: 7.75%
• EPS Growth: -9.85%
• Country: US
• Employees: 83,100
• Sector: Consumer Defensive
• Sector Strength: 94
• Industry: Tobacco
• EPS (TTM): 4.52
• Shares Outstanding: 1,556,488,200
• 10 Day Avg. Volume: 8,067,400
• 30 Day Avg. Volume: 6,929,241
• PEG Ratio: 0.90
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.22
• Price to Cash Flow (P/CF): 14.70
• P/FCF Ratio: 15.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $161.25
• Price Target Upside: 4.78% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

Philip Morris's overall score reflects its strong cash flow and income performance, and positive sentiment from recent earnings calls and corporate events. However, high leverage and potential overvaluation weigh on the score. Continued focus on smoke-free product growth and debt management will be key for sustaining long-term growth.

Positive Factors

Earnings

Philip Morris International reported strong fourth quarter earnings with 10% constant currency growth and over 7% organic sales growth.

Litigation Settlement

The litigation settlement will remove the overhang that has existed since at least 2019 surrounding this claim and allow PM and peers to move on with a workable payment.

Smoke-Free Products

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

Growth Expectations

The risk to earnings remains skewed to the upside.

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 Business Overview & Revenue Model

Company Description

Philip Morris International Inc. operates as a tobacco company working to delivers a smoke-free future and evolving portfolio for the long-term to include products outside of the tobacco and nicotine sector. The company's product portfolio primarily consists of cigarettes and smoke-free products, including heat-not-burn, vapor, and oral nicotine products that are sold in markets outside the United States. The company offers its smoke-free products under the HEETS, HEETS Creations, HEETS Dimensions, HEETS Marlboro, HEETS FROM MARLBORO, Marlboro Dimensions, Marlboro HeatSticks, Parliament HeatSticks, and TEREA brands, as well as the KT&G-licensed brands, Fiit, and Miix. It also sells its products under the Marlboro, Parliament, Bond Street, Chesterfield, L&M, Lark, and Philip Morris brands. In addition, the company owns various cigarette brands, such as Dji Sam Soe, Sampoerna A, and Sampoerna U in Indonesia; and Fortune and Jackpot in the Philippines. The company sells its smoke-free products in 71 markets. Philip Morris International Inc. was incorporated in 1987 and is headquartered in New York, New York.

How the Company Makes Money

Philip 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.

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.

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.

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
10.77B	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

• Technical Analysis Sentiment: Positive
• Last Price: 153.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 153.89 is above the 20-day moving average (MA) of 153.75, above the 50-day MA of 150.01, and above the 200-day MA of 126.24, indicating a bullish trend. The MACD of 2.80 indicates Negative momentum. The RSI at 68.10 is Neutral, neither overbought nor oversold. The STOCH value of 84.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PM.

Philip Morris Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MO	72 Outperform	$95.08B	8.62	-503.31%	7.17%	-0.28%	43.51%
PM	67 Neutral	$235.29B	33.44	-37142.11%	3.54%	7.75%	-9.85%
RLX	63 Neutral	$2.21B	27.97	3.49%	0.46%	106.83%	10.27%
Sector *	63 Neutral	$20.53B	14.04	-16.01%	3.27%	1.30%	4.55%
UVV	62 Neutral	$1.30B	10.55	8.32%	6.15%	12.88%	-6.33%
BTI	61 Neutral	$88.62B	23.22	5.87%	7.08%	-2.51%	―
TPB	57 Neutral	$1.00B	26.42	27.80%	0.50%	-0.13%	2.92%

Philip Morris Corporate Events

Philip Morris Emphasizes Transition to Smoke-Free Products

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.

Philip Morris Reaffirms 2025 Earnings Growth Forecast

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.