Philip Morris (PM) AI Stock Analysis

• Market Cap: $239.53B
• Dividend Yield: 3.15%
• Average Volume (3M): 6.82M
• Price to Earnings (P/E): 34.0
• Beta (1Y): 0.20
• Revenue Growth: 6.83%
• EPS Growth: -4.85%
• Country: US
• Employees: 83,100
• Sector: Consumer Defensive
• Sector Strength: 82
• Industry: Tobacco
• EPS (TTM): 1.55
• Shares Outstanding: 1,556,488,200
• 10 Day Avg. Volume: 8,280,131
• 30 Day Avg. Volume: 6,822,768
• PEG Ratio: N/A
• 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: 0.96
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 9.41
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $184.38
• Price Target Upside: 7.91% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

Philip Morris holds a strong position with robust profit margins and cash flow generation. The positive momentum in technical indicators and strategic focus on smoke-free products further bolster its outlook. However, high leverage and valuation concerns temper the score, requiring cautious optimism.

Positive Factors

Financial Performance

Philip Morris International's robust first-quarter results are an outlier in a highly challenging consumer packaged goods environment, with substantial growth expected for its smoke-free portfolio.

Growth Strategy

The strategy to shift smokers to higher-margin, less-harmful alternatives is viewed favorably, supporting the company’s strong operations and outlook.

Stock Valuation

Philip Morris International has the highest long-term growth profile among mega-cap consumer packaged goods peers and is trading at a significant discount to its theoretical fair value.

Negative Factors

Market Competition

Demand for ZYN continues to exceed management’s expectations with good visibility on supply constraints in the US easing and traction strengthening internationally.

Supply Constraints

Q1 Zyn volume growth is expected to slow due to production capacity constraints.

Philip Morris Business Overview & Revenue Model

Company Description

Philip Morris International Inc. (PM) is a leading global tobacco company, primarily engaged in the manufacturing and sale of cigarettes and other nicotine-containing products. The company operates in various international markets outside of the United States and is well-known for its flagship brand, Marlboro. In addition to traditional tobacco products, Philip Morris is actively investing in and developing smoke-free alternatives, such as heated tobacco products and e-cigarettes, as part of its long-term strategy to transition to reduced-risk products.

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 shows solid profitability with strong profit margins and cash flow generation, typical of the tobacco industry. However, negative equity and high leverage pose financial risks, requiring careful management despite the overall stable financial performance.

Income Statement

Philip Morris demonstrates strong profitability with a consistent increase in gross profit and net income over time. The TTM gross profit margin is approximately 65.1%, and the net profit margin stands at 19.8%. The TTM revenue growth rate compared to the previous year is around 2.36%, indicating steady growth. EBIT and EBITDA margins are robust at 36.4% and 41.8% respectively, showcasing operational efficiency. However, revenue growth is moderate, which is typical for the tobacco industry.

Balance Sheet

The company's balance sheet reveals a negative stockholders' equity, which is a concern as it indicates more liabilities than assets. The debt-to-equity ratio is not calculated due to negative equity, but high total debt suggests significant leverage. The equity ratio is negative due to negative equity, highlighting financial risk. Despite profitability, the leverage position warrants caution.

Cash Flow

Philip Morris displays strong cash flow management with a solid free cash flow of $10.2 billion in the TTM. The operating cash flow to net income ratio is approximately 1.53, indicating efficient cash generation relative to net income. Although the free cash flow growth rate is negative compared to the previous annual period, the company maintains adequate cash flow to cover operations and investments.

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
-11.75B	-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: 170.86
• 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 170.86 is above the 20-day moving average (MA) of 161.79, above the 50-day MA of 156.80, and above the 200-day MA of 130.90, indicating a bullish trend. The MACD of 4.86 indicates Negative momentum. The RSI at 68.99 is Neutral, neither overbought nor oversold. The STOCH value of 89.31 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
PM	78 Outperform	$239.53B	34.04	-37142.11%	3.15%	6.83%	-4.85%
MO	73 Outperform	$99.90B	9.93	-503.31%	6.81%	-1.03%	25.20%
UVV	70 Outperform	$1.44B	11.61	8.79%	5.57%	12.88%	-5.64%
Sector *	64 Neutral	$8.88B	14.97	4.63%	174.27%	3.67%	4.40%
RLX	64 Neutral	$2.24B	29.58	3.49%	0.43%	106.83%	10.27%
BTI	61 Neutral	$94.32B	24.79	5.87%	6.79%	-2.51%	―
TPB	59 Neutral	$1.10B	29.04	27.80%	0.46%	-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.