Stamford, Connecticut-based Philip Morris International Inc. (PM) is a global consumer goods company that manufactures and sells cigarettes and smoke-free nicotine products. Operating in about 170 markets, it is transforming its business by developing science-backed smoke-free alternatives while gradually reducing its reliance on traditional cigarettes. The company has a market capitalization of approximately $297.4 billion.
Shares of this leading tobacco company have underperformed the broader market over the past year. PM has gained 15% during this period, while the broader S&P 500 Index ($SPX) has rallied nearly 21.8%. However, the stock has gained momentum on a year-to-date basis, rising 16.8%, surpassing the index’s 11% gain over the same period.
Narrowing the comparison, PM has outperformed the State Street Consumer Staples Select Sector SPDR ETF (XLP), which has gained 5.9% over the past year and 9.2% this year.
On July 22, Philip Morris International reported its Q2 FY2026 earnings, driving a 3.3% increase in its shares as investors assessed the results. Net revenues grew 10.4% to a record $11.2 billion, driven by growth in both the smoke-free business and combustibles. Adjusted diluted EPS rose 15.2% year over year to $2.20. Additionally, quarterly shipments climbed 2.5%, driven by strong momentum in smoke-free products, with IQOS leading a 7.5% increase, alongside resilient combustible tobacco sales in markets where smoke-free alternatives remain restricted or underpenetrated.
Philip Morris raised its full-year 2026 adjusted diluted EPS forecast to $8.26 to $8.41, while maintaining its currency-neutral outlook at $8.11 to $8.26. For the third quarter, it guided adjusted diluted EPS of $2.20 to $2.25.
For the current fiscal year, ending in December 2026, analysts expect PM’s EPS to increase 10.5% to $8.33 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 14 analysts covering PM stock, the consensus is a “Moderate Buy.” That's based on eight "Strong Buys," two "Moderate Buys," and four "Holds."
This configuration is more bullish than it was a month ago, when the stock had seven "Strong Buy" suggestions.
On July 23, Needham analyst Gerald Pascarelli maintained a “Buy” rating on Philip Morris International and raised the price target to $215 from $200.
The mean price target of $207.43 represents a 10.7% premium to PM's current share price. The Street-high price target of $225 suggests potential upside of 20.1%.
