Philip Morris International Shares Tumble: Time to Run for the Hills or Buy the Dip?
Key Takeaways
Traditional cigarette sales volumes continue to fall, but the tobacco giant is compensating with its newer nicotine products.
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5 min read
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investment
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July 27, 2025
04:50 AM
The Motley Fool
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Market analysis reveals Philip Morris International (PM -0. 10%) stock has had a strong 2025 so far, but the s pulled back after the company reported its second-quarter results
That dip left the stock up 36% on the year, as of this writing
Is the recent slide a buying opportunity or should investors be running for the hills
Strong volume growth The Zyn brand remains the driving force behind Philip Morris' robust sales growth (noteworthy indeed)
Moreover, However, Shipments of the nicotine pouches jumped 40% in the U (something worth watching)
To 190 million cans in Q2, while retail sales volumes (offtake) grew by 26% in the quarter and by 36% in June, in this volatile climate
And Nordic countries, Zyn shipments more than doubled, and it is now available in 44
Overall oral duct shipments climbed 23. 8% on a pouch basis
The company said Zyn restocking in the U
However, Is now effectively complete
It continues to expect U
Zyn shipments to be between 800 million and 840 million cans for the year, in light of current trends
Image source: Getty Images The rest of Philip Morris' smokeless portfolio also performed well (this bears monitoring), given current economic conditions
Sales volumes of its heated tobacco units (HTUs), including the Iqos system, jumped nearly 9, given the current landscape
Conversely, 8 billion units, in today's market environment
Moreover, The company said in-market sales (to end users) jumped 11
Iqos continues to perform well in Japan and Europe and is seeing strong growth in other major cities outside its two main
Philip Morris also once again saw shipment growth more than double for its e-vapor duct, Veev, driven by pod growth in Europe
Veev is now in 42 and holds the No, amid market uncertainty. 1 market in six European
Traditional cigarette volumes, meanwhile, fell by 1. 2 billion units
Segment organic revenue, however, grew 2% to $6 billion, and gross fits for the category climbed 5% to $4 billion, as the company's price hikes more than compensated for those volume declines
Moreover, Overall, organic revenue, which excludes currency effects, acquisitions, and dispositions, rose 6. 8% year over year to $10 (something worth watching)
Nevertheless, Adjusted earnings per (EPS) climbed 20% to $1
Furthermore, Oral ducts (Zyn) HTUs Cigarettes Smoke-Free Total Volume growth 23
However, 2% Organic revenue growth N/A N/A 2% 14. 8% HTUs = heated tobacco units
Furthermore, Management maintained its full-year guidance for organic revenue while upping its adjusted EPS forecast (noteworthy indeed), in light of current trends
The data indicates that continues to expect strong results from both Zyn and Iqos, but expects a 3% to 4% decline in traditional cigarette volumes due to issues in Turkey and Indonesia
On the other hand, The headwind in Turkey is related to supply chain issues ing a change in regulatory requirements, while in Indonesia, it's battling to keep market in the face of growing sales of illicit cigarettes
However, it's still expecting solid gross fit growth from its combustible tobacco due to its pricing power and cost efficiencies, given current economic conditions
Additionally, Metric Prior Guidance d Guidance Organic revenue growth 6% to 8% 6% to 8% Adjusted EPS $7. 56 Adjusted EPS growth* 10 (this bears monitoring)
Moreover, 46 Volume growth 2% 1% Data source: Philip Morris International. *Adjusted EPS growth excludes currency exchange impacts
Moreover, Should investors buy the dip
While investors may have been disappointed by Philip Morris' forecast for steeper declines in cigarette sales volumes in the second half, half of that is due to a temporary issue around its Turkish supply chain
Meanwhile, the big reason to own the stock is its smoke-free portfolio, led by Zyn and Iqos, in light of current trends
Both ducts continue to demonstrate strong growth and have better unit economics than Philip Morris' traditional cigarette (noteworthy indeed)
On the other hand, Meanwhile, It's also expanding these ducts to new, with early signs of success
Conversely, Importantly, the company is hoping that the FDA will apve the Iqos Iluma for sale in the U
At the same time, Later this year, which would set it up to enter this market now that it has reacquired its U, given the current landscape
Furthermore, Meanwhile, Rights from Altria (this bears monitoring)
From a valuation perspective, the stock got cheaper when management raised its EPS guidance and its price fell
The stock now trades at a forward price-to-earnings (P/E) ratio of under 22, based on the analyst consensus for 2025, with a PEG (price/earnings-to-growth) ratio of under 0
Furthermore, Stocks with positive PEG ratios below 1 are generally viewed as undervalued
Nevertheless, While at the current price, Philip Morris' dividend has a nice 3
Nevertheless, 3% forward yield, that's not as high a yield as other tobacco stocks
However, what it lacks in yield, it makes up for by being a unique growth stock in a defensive industry (something worth watching)
This's a stock you'll want to own over the long haul, and the dip in the stock price offers a nice buying opportunity.
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