Investing in Philip Morris: A Look Ahead to 2025
At Extreme Investor Network, we are constantly on the lookout for exciting investment opportunities that have the potential for significant growth. One such opportunity that has caught our eye is Philip Morris, the Marlboro maker that is shifting its focus from traditional cigarettes to smoke-free products.
According to Goldman Sachs analyst Bonnie Herzog, Philip Morris shares have more room to run, with a $150 price target that implies a 21% upside from the current stock price. Herzog has reiterated her buy rating on the stock and called Philip Morris a top pick heading into 2025.
But what exactly is driving this optimism around Philip Morris? Herzog believes that the company is transforming into a faster growing and more profitable business, positioning itself as an earnings compounder with an attractive valuation. She emphasizes that many investors are not fully appreciating the company’s improving fundamentals and compelling valuation.
One key factor driving Philip Morris’s growth is its shift towards smoke-free products. The company aims to have two-thirds of its business tied to smoke-free products by 2030, expanding its total addressable market by 60% in the U.S. Herzog highlights two products in particular that are expected to drive this growth – the Zyn oral nicotine pouch and the heated tobacco product Iluma.
The Zyn oral nicotine pouch has shown significant growth and has become a symbol of the shift away from traditional cigarettes. Philip Morris recently announced a $600 million investment to build a new Zyn production facility in Colorado, easing supply constraints and boosting the product’s outlook in the U.S.
Additionally, the domestic debut of the heated tobacco product Iluma and the potential for strong fourth quarter earnings and robust guidance for FY25 are seen as catalysts for Philip Morris shares in 2025. Despite already jumping more than 33% in 2024, Herzog remains bullish on the stock’s long-term growth potential.
As we look ahead to 2025, we believe that Philip Morris presents a compelling investment opportunity for investors seeking exposure to a company with innovative products, strong growth prospects, and a clear strategy for the future. Stay tuned to Extreme Investor Network for more insights and analysis on the latest investment opportunities in the market.