Philip Morris' ILUMA Rollout: Will It Power H2 Volume Growth? (Revised)

Philip Morris International (PM) is leaning on its ILUMA platform to keep heated tobacco unit (“HTU”) momentum rolling into the back half of 2025. In the second quarter of 2025, adjusted in-market sales growth for HTUs reaccelerated to 11.4%, with Europe up 9.1% and Japan advancing 7.8%. Management credits the continued rollout of ILUMA i and an expanding consumables range, such as DELIA and the tobacco-free LEVIA, for strengthening market share and boosting user adoption.

In Europe, ILUMA’s expansion helped IQOS HTU share climb 1.2 percentage points to 10.9%, with offtake share topping 20% in key cities of 12 markets. Japan remains a cornerstone, with more than 10 million users and strong performance from TEREA and SENTIA consumables. In addition, Philip Morris has now launched ILUMA in more than 30 markets, leveraging experience from mature markets to accelerate awareness, conversion and switching among legal-age smokers.

With PMI estimating smoke-free product volume growth of 12-14% in 2025, the ILUMA upgrade cycle is expected to be an important factor in sustaining double-digit HTU gains. The second half will bring a focus on maintaining rollout momentum while addressing competitive dynamics and regulatory developments. Outcomes will depend on factors such as repeat usage rates, market share progression in existing geographies and execution in planned launches. If current adoption patterns continue, ILUMA could contribute meaningfully to balancing declines in the combustible segment.

PM’s Peer Smoke-Free Strategies

On its second-quarter 2025 earnings call, Turning Point Brands, Inc. (TPB) reported that Modern Oral sales reached $30.1 million, up nearly eightfold year over year, driven by growth in its FRE and ALP brands. The company raised its 2025 Modern Oral revenue target to $100-$110 million. Turning Point Brands emphasized flavor innovation, brand visibility and expanded retail presence as core strategies to capture share in the growing smoke-free category.

PM’s Price Performance, Valuation & Estimates

Shares of Philip Morris have lost 5.7% in the past month against the industry’s growth of 1.3%.

From a valuation standpoint, PM trades at a forward price-to-earnings ratio of 21.17X, up from the industry’s average of 15.36X.

The Zacks Consensus Estimate for PM’s 2025 and 2026 earnings per share has inched up by 4 cents and 7 cents in the past 30 days to $7.49 and $8.39, respectively.

Philip Morris currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

(We are reissuing this article to correct a mistake. The original article, issued on August 12, 2025, should no longer be relied upon.)

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