PM Stock Up 6.9% Post Q1 Earnings: A Green Light for Investors?

Philip Morris International Inc.’s PM stock has risen 6.9% since reporting first-quarter 2025 results on April 23, 2025, sparking renewed investor interest. The market’s upbeat reaction was not just about beating estimates — it was a reflection of growing confidence in the company’s long-term strategy. With strong growth in its smoke-free product segment and improved profit guidance, many investors are now wondering whether Philip Morris stock is set for a long-term uptrend.

PM Trades Above 50 & 200-Day Moving Averages

Philip Morris shares hit a new all-time high of $176.49 on May 7, closing at $175.36. The stock is trading well above its 50-day and 200-day moving averages — an important bullish technical indicator. This breakout is not just technical but reflects growing market confidence in Philip Morris’ shift to smoke-free alternatives like IQOS, which are showing strong adoption amid modestly declining cigarette industry trends.

PM’s Price Performance Vs. Peers

Over the past month, Philip Morris stock has delivered a strong return of 15.5%, clearly outperforming the broader market and its industry peers. During this time, the Zacks Tobacco industry rose 12.2%, while the S&P 500 gained just 2.8%. Philip Morris outperformed peers like Altria Group, Inc. and MO British American Tobacco p.l.c. BTI in the last month.  Altria delivered an 8.1% return, while British American Tobacco increased 10.5% during this time.

Philip Morris’ Q1 Performance: Key Takeaways

Philip Morris delivered strong first-quarter 2025 results, with revenues and earnings surpassing the respective Zacks Consensus Estimate and showing year-over-year growth. The performance was driven by continued strength across product categories and regions, particularly in its smoke-free offerings like IQOS and ZYN, while its traditional combustible segment remained stable. (Read: Philip Morris Q1 Earnings & Sales Beat Estimates, Stock Up)

Adjusted earnings per share (EPS) came in at $1.69, marking a 12.7% increase from the prior year. Net revenues rose 5.8% to $9.3 billion on a reported basis and grew 10.2% organically in the first quarter. The organic revenue growth was supported by favorable pricing — mainly from elevated combustible tobacco pricing — and a strong volume mix, especially from rising demand for smoke-free products.

Smoke-free products remained a major growth driver in the quarter. Revenues from this segment jumped 15% year over year, or 20.4% on an organic basis, and now account for 42% of total company revenues. IQOS led the inhalable smoke-free category, while ZYN continued to gain traction in the oral nicotine segment with rising shipment volumes. Meanwhile, revenues from combustible products held steady, growing 3.8% on an organic basis.

PM’s Upbeat Outlook Indicates Strength

Philip Morris is positioning itself for another strong year in 2025, backed by solid financial performance and accelerating momentum in its smoke-free portfolio. The company expects total volumes to grow 2%, marking its fifth straight year of positive volume growth. Smoke-free products are projected to remain the primary growth engine, with volume growth of 12–14%, underscoring Philip Morris’ ongoing shift toward reduced-risk alternatives.

In the U.S. market, nicotine pouch shipments are forecast to be between 800 and 840 million cans in 2025, representing impressive year-over-year growth of 38-45%. This surge reflects the growing consumer adoption of ZYN and strengthens the company’s long-term smoke-free strategy.

On the financial front, management forecasts net revenue growth of 6-8% on an organic basis, signaling strong consumer demand and operational efficiency during the year. Philip Morris now expects adjusted earnings per share (EPS) for 2025 in the range of $7.36 to $7.49, which implies 12–14% growth from the prior year. This is a notable revision from its earlier estimate of $7.04 to $7.17, which projected growth of 7.2–9.1%. Even excluding currency impacts, adjusted EPS is forecasted in the range of $7.26 to $7.39, indicating solid earnings momentum with growth between 10.5% and 12.5%. For the second quarter of 2025, Philip Morris envisions adjusted EPS in the range of $1.80-$1.85, also indicating year-over-year growth.

Earnings Estimates for Philip Morris Indicate Uptrend

The Zacks Consensus Estimate for PM’s 2025 and 2026 EPS increased 4.6% and 5.7%, respectively, in the past 30 days. The upward revisions in earnings estimates indicate a bullish outlook for the stock. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)

For 2025, the Zacks Consensus Estimate for PM’s sales and EPS implies 8.1% and 13.7% year-over-year growth, respectively. The consensus mark for 2026 sales and EPS indicates 8.6% and 11.7% year-over-year growth, respectively.

The Zacks Consensus Estimate for Philip Morris’ second-quarter 2025 EPS rose almost 4% in the past 30 days, highlighting optimism over the company’s near-term prospects.

What Does the Premium Stock Valuation Mean for Philip Morris?

Philip Morris is trading at a forward price-to-earnings (P/E) ratio of 22.56, higher than the industry average of 15.04. This premium valuation reflects investor confidence in the company’s long-term growth strategy, especially its successful transition toward smoke-free products. While PM’s P/E is slightly below that of Turning Point Brands TPB, which trades at 22.80, it is above tobacco peers like Altria (11.24) and British American Tobacco (9.54). 

This divergence highlights that investors are willing to pay more for companies like Philip Morris that are innovating and expanding in reduced-risk product categories. The premium valuation, therefore, signals the market’s recognition of Philip Morris as a forward-looking, growth-oriented player in a historically defensive sector.

Investor Takeaway for PM

With strong earnings momentum, accelerating growth in smoke-free products and a clear upward revision in guidance, Philip Morris presents a compelling case for long-term investors. The stock’s premium valuation is supported by its strategic transformation and consistent outperformance. While not without risks, particularly from regulatory and competitive pressure, PM’s strong fundamentals and bullish technical setup suggest it could remain a solid addition to a growth-focused portfolio. Investors looking for stability with upside in the evolving tobacco and nicotine space may find Philip Morris an attractive buy-on-strength opportunity. 

At present, PM sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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