From Zyn to vapes: Big Tobacco pushes further toward cigarette alternatives. Here’s who could come out on top
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 21 2024
0mins
Should l Buy PM?
Source: CNBC
Tobacco Industry Shifts: Philip Morris International is investing $600 million in a new facility for its Zyn oral nicotine pouch due to rising demand and shortages, while other companies like Reynolds American are introducing new nicotine-free products to adapt to declining cigarette sales.
Market Challenges and Opportunities: The tobacco industry faces competition from vaping and illicit markets, with companies exploring reduced-risk products (RRPs) to replace lost cigarette revenue; analysts remain optimistic about the potential growth of smoke-free alternatives despite regulatory challenges.
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Analyst Views on PM
Wall Street analysts forecast PM stock price to rise
11 Analyst Rating
8 Buy
3 Hold
0 Sell
Moderate Buy
Current: 157.330
Low
175.00
Averages
191.95
High
210.00
Current: 157.330
Low
175.00
Averages
191.95
High
210.00
About PM
Philip Morris International Inc. is an international tobacco company. The Company’s product portfolio primarily consists of cigarettes and smoke-free products. Its smoke-free business (SFB) also includes wellness and healthcare products, as well as consumer accessories, such as lighters and matches. The Company’s segments include Europe Region; South and Southeast Asia, Commonwealth of Independent States, Middle East and Africa Region (SSEA, CIS & MEA); East Asia, Australia & PMI Global Travel Retail (EA, AU & PMI GTR), and Americas Region. The Company's brands include Marlboro, HEETS, IQOS, IQOS ILUMA, TEREA, VEEV and ZYN. Its IQOS smoke-free product brand portfolio includes heated tobacco and nicotine-containing vapor products. Its international cigarette brands are Chesterfield, L&M, and Philip Morris. It also owns a number of local cigarette brands, such as Dji Sam Soe and Sampoerna A in Indonesia, and Fortune and Jackpot in the Philippines.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- GDP Revision Impact: The U.S. fourth-quarter GDP was revised down to 0.7% in March, increasing the risk of economic slowdown, and investors should be aware of the potential for two consecutive quarters of negative growth, which could be viewed as a shallow recession.
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- Pfizer Dividend Advantage: Pfizer currently offers a dividend yield of 6.2%, and despite its stock price being down 55% from all-time highs, its investments in oncology and obesity drug markets may provide future growth potential, making it a stable income source.
- UnitedHealth Group Challenges: UnitedHealth Group has a dividend yield of 3.4%, and despite facing rising healthcare costs and cyberattack challenges, it is projected to rebound to $24 billion in operating earnings by 2026, supporting future dividend payments.
- Healthcare Spending Growth: As the U.S. population ages and healthcare costs inflate, healthcare spending is expected to continue rising, and while the insurance industry may not be popular, UnitedHealth Group's long-term growth potential remains noteworthy.
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