Deutsche Bank has raised its price target for Philip Morris International (NYSE:PM) to $142 from $135, maintaining a “Buy” rating.
Philip Morris’s shift towards smokeless products and strong quarterly earnings report, with sales rising 8.4% year-over-year to $9.9 billion, have contributed to its stock reaching new heights.
The company’s focus on non-cigarette products, like ZYN nicotine pouches and IQOS heated tobacco devices, has driven significant growth, with ZYN shipments in the U.S. increasing by 41.4%.
On October 22, 2024, Deutsche Bank reaffirmed its “Buy” rating for Philip Morris International (NYSE:PM), setting a new price target of $142, up from $135. At the time, PM’s stock was valued at $131.41. This endorsement comes as Philip Morris has shown strong market performance, particularly in the last three months.
Philip Morris has been a standout performer, with its stock price reaching new heights. This resurgence follows a period where tobacco stocks were less favored by institutional investors. The company’s strategic shift towards smokeless products, like ZYN nicotine pouches and IQOS heated tobacco devices, has reignited interest in the stock.
The company’s recent quarterly earnings report further supports this positive outlook. Philip Morris reported record earnings, with sales rising 8.4% year-over-year to $9.9 billion, surpassing estimates by 2.3%. Earnings per share also exceeded expectations, increasing 14.4% to $1.91. This strong financial performance led to an 8% midday trading surge in PM’s stock, reaching all-time highs.
Philip Morris’s success is largely driven by the growing demand for its non-cigarette products. Shipments of ZYN nicotine pouches increased by 43.6%, while heated tobacco unit shipments rose by 8.9%. Even traditional cigarette shipments saw a slight increase of 1.3%. These results have prompted the company to raise its full-year earnings outlook.
The company’s focus on smokeless alternatives has paid off, with ZYN seeing a 41.4% increase in U.S. shipments. The easing of supply-chain issues has further supported this growth. Additionally, the IQOS device has gained traction in markets like Japan, Europe, and Indonesia. As a result, Philip Morris’s stock has seen a significant increase, with a current price of $131.41, marking a 10.47% rise.
