Morgan Stanley has raised its price target for Philip Morris (PM, Financial) to $182, up from $156, while maintaining an Overweight rating on the stock. The financial firm made this adjustment in response to stronger-than-anticipated first-quarter performance.
Philip Morris is noted for showing robust growth within the consumer packaged goods sector, which Morgan Stanley describes as "the highest in CPG growth." The company's resilient business model has led to the reconsideration of its valuation, suggesting it deserves a higher market rating. This positive outlook has prompted Morgan Stanley to adjust its estimates upwards.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 13 analysts, the average target price for Philip Morris International Inc (PM, Financial) is $161.72 with a high estimate of $190.00 and a low estimate of $102.00. The average target implies an downside of 3.51% from the current price of $167.60. More detailed estimate data can be found on the Philip Morris International Inc (PM) Forecast page.
Based on the consensus recommendation from 15 brokerage firms, Philip Morris International Inc's (PM, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Philip Morris International Inc (PM, Financial) in one year is $125.84, suggesting a downside of 24.91% from the current price of $167.595. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Philip Morris International Inc (PM) Summary page.
PM Key Business Developments
Release Date: April 23, 2025
- Organic Net Revenue Growth: +10.2%, reaching $9.3 billion.
- Smoke-Free Business Revenue Growth: +20% organic net revenue growth.
- Smoke-Free Business Gross Profit Growth: +33% organic gross profit growth.
- Adjusted Operating Income Growth: +16% organic growth, +250 basis points expansion in adjusted OI margins to 40.7%.
- Adjusted Diluted EPS Growth: +17.3% in constant currency, +12.7% in dollar terms to $1.69.
- IQOS HTU-Adjusted IMS Growth: +9.4%.
- ZYN Shipment Growth: +53%, reaching 202 million cans.
- VEEV Shipment Growth: Shipments more than doubled year-on-year.
- Combustible Net Revenue Growth: +3.8% organic growth.
- Gross Margin Expansion: +340 basis points on an organic basis.
- SG&A Cost Savings: Over $180 million in gross cost savings in Q1.
- 2025 Adjusted Diluted EPS Forecast: $7.36 to $7.49, reflecting +12% to +14% growth in dollar terms.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Philip Morris International Inc (PM, Financial) reported a strong start to 2025 with double-digit increases in organic net revenue, operating income, and adjusted diluted EPS.
- The smoke-free business performed exceptionally well, with shipment volumes up 14.4% year on year and organic net revenue growth of 20%.
- ZYN shipments in the US increased by 53%, exceeding initial expectations, and international nicotine pouch can volumes grew by 53%.
- IQOS delivered close to 10% HTU-adjusted IMS growth, with strong performance in Japan and Europe.
- The company achieved a 16% organic operating income growth and a 250 basis points expansion in adjusted operating income margins to 40.7%.
Negative Points
- Currency volatility led to a $0.07 unfavorable currency variance, impacting adjusted diluted EPS.
- There was a notably negative geographic mix in combustibles due to increased volumes in lower-margin markets like Turkey and Egypt.
- The annualization impact of the EU characterizing flavor ban affected IQOS growth in Europe.
- The company faces uncertainties in the global economic outlook, which could impact future performance.
- ZYN experienced out-of-stock issues in the US, affecting retailer inventories and potentially slowing growth.
