Philip Morris International: A Closer Look at Its Recent Surge
Philip Morris International (NYSE: PM) has recently made headlines by hitting an all-time high in its stock price, climbing nearly 40% in 2025 alone and over 75% in the past year. This remarkable performance indicates strong investor interest, particularly as the company’s earnings reports continue to impress. As an investor myself, I’ve previously highlighted its potential, including a prediction last April that it was poised to break out of a year-long trading range. The reality? It certainly did—and then some.
Is It Still a Good Time to Invest?
For those contemplating whether now is the right moment to invest, let’s dive into the latest first-quarter results.
One of the most significant growth drivers for Philip Morris has been its innovative product, Zyn—a nicotine pouch that has captivated the market, especially among young adults and working professionals due to its discreet nature and flavor variety. In the first quarter, Zyn’s growth was staggering, with U.S. shipment volumes soaring 53% to 202 million cans. Internationally, shipments also rose by 53%, with a staggering 182% increase when excluding established Nordic markets. Overall, oral product shipments experienced a solid 27% growth.
However, it’s vital to note that some of this growth resulted from retail inventory restocking. Still, the company has seen a robust off-take volume for Zyn—around 15%. As in-store availability improves, so does its marketing strategy, which is expected to accelerate this growth farther. Philip Morris has increased its U.S. Zyn shipment forecast to between 800 million and 840 million cans, up from the previous range of 780 million to 820 million.
Image source: Getty Images
Diverse Product Portfolio with Strong Performance
Beyond Zyn, Philip Morris has seen significant growth in its Heated Tobacco Units (HTUs)—which includes the IQOS system—rising nearly 12% to 37.1 billion units sold. In-market sales saw a 9% increase in Japan and over 7% in Europe, with notable growth in urban areas such as Jakarta, Seoul, and Mexico City. Additionally, their e-vapor product, VEEV, experienced more than double the shipment growth driven by European demand.
Traditional cigarette volumes also saw modest growth, climbing 1.1% to 144.8 billion units. While this sector may seem stable, it’s important to recognize that the market landscape is shifting, and companies reliant solely on legacy products face greater challenges than Philip Morris, which is diversifying effectively.
Solid Financial Indicators
In the latest reports, Philip Morris reported a 10% organic revenue growth to $9.3 billion, with adjusted earnings per share (EPS) climbing 17% to $1.76. Gross profits outpaced revenue, increasing 16% on an organic basis—indicative of the company’s shift towards higher-margin products like Zyn and IQOS.
The company has maintained its full-year guidance with a modest adjustment for currency fluctuations, projecting organic revenue growth between 6% to 8% and adjusted EPS of $7.01 to $7.14.
Valuation Perspective
From a valuation standpoint, Philip Morris is trading at a forward price-to-earnings (P/E) ratio of 23 based on analyst consensus for 2025, with a PEG (price/earnings-to-growth) ratio below 0.4. Historically, stocks with PEG ratios under 1 are viewed as undervalued, making PM attractive for those looking for growth at a reasonable price.
With a 3.2% forward dividend yield and continued resilience amidst macroeconomic challenges, Philip Morris is positioned to be a solid investment.
Future Opportunities
Looking ahead, the company has clear avenues for expansion. Philip Morris is ramping up production to meet Zyn demand in the U.S. while beginning to explore international markets outside the Nordics. Additionally, they’re testing the waters with their IQOS product in Austin, Texas, and aim for a broader rollout pending FDA approval for its latest device.
Conclusion: A Growth Stock in a Defensive Industry
Overall, Philip Morris International represents a compelling growth stock within a traditionally defensive industry. The dual focus on evolving consumer preferences through innovative products and sustained demand for traditional offerings positions the company well for future growth.
While every investment carries risks, this is a stock worth watching. Consider taking advantage of any future dips as the market adjusts, while remaining aware of broader economic factors that could influence stock performance.
Before making any investment decisions, it’s always wise to conduct your own research or consult with a financial advisor to align with your long-term financial goals.