Close Menu
Invest Insider News
    Facebook X (Twitter) Instagram
    Monday, July 7
    Facebook X (Twitter) Instagram Pinterest Vimeo
    Invest Insider News
    • Home
    • Bitcoin
    • Commodities
    • Finance
    • Investing
    • Property
    • Stock Market
    • Utilities
    Invest Insider News
    Home»Investing»Philip Morris International Just Raised Guidance Again. Is Now a Great Opportunity to Buy the Stock?
    Investing

    Philip Morris International Just Raised Guidance Again. Is Now a Great Opportunity to Buy the Stock?

    July 27, 20244 Mins Read


    The stock offers solid growth and sports an attractive dividend yield.

    One of my favorite stocks in the consumer staple space, Philip Morris International (PM 0.14%), just reported strong second-quarter results and raised its full-year guidance once again. The stock is up over 16% year to date and sports a nearly 5% yield.

    Let’s take a look at the tobacco company’s most recent results and why the stock still looks like an attractive investment option.

    Zyn continues to lead the way

    Zyn continues to help power Philip Morris’ results, with volumes for the nicotine pouches rising more than 50% to 149.9 million cans. Heated tobacco units (HTUs), which include its IQOS system, meanwhile, rose 13% to 35.5 billion units.

    Traditional cigarette volumes edged up 0.4% to 43.5 billion units. However, the company did lose some cigarette market share in the quarter, falling 40 basis points to 23.6%.

    Overall, organic revenue, which excludes currency impacts and acquisitions, rose 9.6% to $9.5 billion. Adjusted EPS in constant currency climbed 10.6% to $1.77.

    On an organic basis, combustible tobacco revenue grew 4.8% driven by a high-single-digit increase in pricing. Smoke-free product revenue jumped 18.3%, also organically. 

    Gross margins increased by about 70 basis points to 64.7%. The company said that smoke-free gross margins rose by 220 basis points, while combustible gross margins increased 50 basis points. It was the first improvement in combustible gross margins after seven straight quarters of declines.

    A woman vaping.

    Image source: Getty Images.

    Looking ahead, Philip Morris forecast 2024 organic revenue to grow by between 7.5% to 9%, up from a prior outlook of 7% to 8.5% growth. It is projecting adjusted EPS of $6.33 to $6.45. Excluding currency, it is projecting adjusted EPS of between $6.67 to $6.55, representing 11% to 13% growth, up from previous guidance for 9% to 11% EPS growth.

    Management now expects volume growth of 1% to 2%, up from a prior outlook of 0% to 1% growth. It guided the company to generate about $11 billion in operating cash flow on a spending of $1.3 billion to $1.4 billion in capital expenditures (capex), mostly for increasing capacity in the U.S. for Zyn.

    For Q3, it is looking for adjusted EPS of between $1.77 and $1.82.

    This was an excellent quarter from Philip Morris all around. Zyn continues to show strong growth despite experiencing some supply constraints, while IQOS has been performing well in its key European markets while gaining traction in Japan. The company also said that, while it’s in its early days, its VEEV vaping brand has already become the closed-pod leader in five European markets and is on its way to profitability. The company will also be testing IQOS in its first U.S. market, Austin, Texas, in Q4. It expects to receive full FDA authorization in the second half of next year.

    Just as importantly, Philip Morris is also starting to see improved gross margins. Zyn and IQOS have better unit economics and gross margins than traditional cigarettes, but the company also has begun to see a recovery in combustible gross margins as well.

    The company pays a $1.30 quarterly dividend, which is good for a forward dividend yield of 4.7%. The company’s projected $11 billion in operating cash flow easily covers the approximately $8 billion in dividends it pays out each year.

    Is now a good time to buy Philip Morris stock?

    Philip Morris has the unique quality of being a growth stock in a defensive industry. Zyn and IQOS remain solid revenue growth drivers that also come with higher margins. Zyn appears to have a long runway both in the U.S. as well as expansion into other markets. Meanwhile, the company has a solid opportunity in front of it with IQOS in the U.S. after buying back its rights. Given that the company doesn’t sell cigarettes in the U.S., these would be all new users for the company.

    Looking at valuation, Philip Morris trades at a forward price-to-earnings (P/E) ratio of under 16 times based on 2025 analyst estimates, as well as a PEG (price/earnings-to-growth ratio) ratio under 1. Given its both defensive and growth qualities, as well as its lack of cigarette exposure to the declining U.S. market, that looks like an attractive valuation in my book.

    PM PE Ratio (Forward 1y) Chart
    PM PE Ratio (Forward 1y) data by YCharts.

    While the stock has performed well this year, I do not think it is too late to buy the name at current levels.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Previous ArticleEdward Snowden on Bitcoin: We Are Winning
    Next Article Talk Your Book: Investing in Corporate Culture

    Related Posts

    Investing

    Graphique CAC 40 direct en temps réel

    July 2, 2025
    Investing

    CRISPR Therapeutics, le couteau Suisse de la génétique

    July 2, 2025
    Investing

    Historique des données S&P 500 Futures

    July 1, 2025
    Leave A Reply Cancel Reply

    Top Posts

    How is the UK Commercial Property Market Performing?

    December 31, 2000

    How much are they in different states across the US?

    December 31, 2000

    A Guide To Becoming A Property Developer

    December 31, 2000
    Stay In Touch
    • Facebook
    • YouTube
    • TikTok
    • WhatsApp
    • Twitter
    • Instagram
    Latest Reviews

    Auramet Closes $350 Million Syndicated Revolving Credit Facility to Support Metals Franchise

    June 24, 2025
    Bitcoin

    MicroStrategy’s Saylor Battles Market Fire With Epic Post

    October 10, 2024
    Utilities

    State’s largest privately owned water utilities seek rate increase amid lawmaker scrutiny – Shaw Local

    July 19, 2024
    What's Hot

    Pourquoi la garantie de Bitcoin d’une cible de 135 000 $ pourrait émerger cette semaine

    May 20, 2025

    les fondamentaux de l’or restent bons

    September 4, 2007

    US Stock Futures Slump, Asian Stocks Routed Amid Recession Fears

    August 5, 2024
    Most Popular

    Les principales cryptomonnaies se raffermissent ; le bitcoin dépasse le niveau de 86 000 $.

    April 2, 2025

    Capital gains is the fastest growing income class, can be taxed higher: Finance Secretary TV Somanathan  

    July 29, 2024

    Voici pourquoi la Banque centrale européenne (BCE) ne comprend toujours pas Bitcoin

    March 1, 2025
    Editor's Picks

    Les banques françaises vent debout contre une norme européenne sur leur devoir de vigilance

    February 24, 2025

    Trafigura Temporarily Seized Ghana Property In UK Over $134M Judgment Debt: “Until We Pay In Full”

    August 22, 2024

    Bitcoin, Ethereum Prices Suddenly Plunge as Liquidations Top $175 Million

    August 15, 2024
    Facebook X (Twitter) Instagram Pinterest Vimeo
    • Get In Touch
    • Privacy Policy
    • Terms and Conditions
    © 2025 Invest Insider News

    Type above and press Enter to search. Press Esc to cancel.