Philip Morris International Inc. (PM): A Bull Case Theory 

We came across a bullish thesis on Philip Morris International Inc. on Recital’s Substack by Anthony Yiu. In this article, we will summarize the bulls’ thesis on PM. Philip Morris International Inc.’s share was trading at $156.15 as of December 1st. PM’s trailing and forward P/E were 22.47 and 18.80 respectively according to Yahoo Finance.

Philip Morris International (PMI) reported strong Q3 2025 results, beating EPS expectations and raising its full-year forecast, yet the stock reacted negatively as investors scrutinized the sustainability of its U.S. nicotine pouch growth. Adjusted EPS rose 17.3% to $2.24 on 9.4% higher revenues, driven by smoke-free products now accounting for 41% of sales.

Heated tobacco unit shipments increased 15.5%, and ZYN’s U.S. volumes surged 37% to 205 million cans, aided by a major promotional relaunch. Despite this momentum, PMI revised its full-year organic operating income growth down to 10–11.5%, citing a ~$100 million ZYN-related impact. This guidance cut, tied to promotional costs and margin pressure, raised concerns over ZYN’s pricing power and competitive moat. Management also flagged short-term headwinds, including inventory reductions in ZYN and IQOS, tempering the Q4 outlook.

Beneath these concerns, PMI’s fundamentals remain resilient. Marlboro delivered robust pricing-driven profit growth, offsetting smoke-free margin compression and underscoring the legacy business’s cash-generation strength. However, ZYN’s international pouch volumes declined sequentially, suggesting rising competition in Nordic and global markets from BAT and Altria-backed entrants. VEEV’s 91% shipment growth and disciplined expansion across 46 markets exemplify PMI’s balanced, profitability-first strategy, while IQOS maintained strong brand loyalty in Japan despite intensified rival launches.

Ultimately, this quarter signaled recalibration, not regression. The market repriced PMI on margin realism rather than growth potential. With enduring brand strength, strategic clarity, and diversified smoke-free assets, PMI’s long-term transformation remains on course—though investors must expect a more complex, capital-intensive path to a smoke-free future.

Previously we covered a bullish thesis on Philip Morris International Inc. (PM) by Hidden Market Gems in April 2025, highlighting its macro-resilient model and strong pricing power. The stock has appreciated by about 2.86% since our previous coverage. The thesis still stands on PM’s resilient fundamentals. Anthony Yiu shares a similar view but focuses on ZYN’s sustainability challenges.

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Disclosure: None.