Investment Opportunities in Consumer Staples Sector
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 01 2026
0mins
Source: Fool
- Philip Morris Growth Potential: Despite declining cigarette volumes, Philip Morris International (PM) demonstrates strong pricing power that drives sales growth, with an expected organic revenue increase of 5% to 7% in 2023, while its smoke-free products like Iqos and Zyn saw market sales growth of 11% and 10%, respectively, indicating future growth potential.
- Coca-Cola Brand Strength: Coca-Cola (KO) leverages its strong brand equity and global marketing strategies, achieving 10% organic revenue growth in Q1, with concentrate sales rising by 8%, and projecting 4% to 5% organic revenue growth and 8% to 9% EPS growth for the year, reflecting robust performance amid market recovery.
- Chewy's Margin Expansion: Online pet retailer Chewy (CHWY) achieved an 8.3% revenue growth through its autoship model, with EBITDA margins increasing to 5.7%, and is projected to expand margins by another 100 basis points this year, with a long-term goal of reaching 10%, showcasing the attractiveness of its business model and profitability growth.
- Defensive Nature of Consumer Staples: The consumer staples sector is viewed as a defensive investment during economic downturns, and while tech stocks attract attention, companies like Philip Morris, Coca-Cola, and Chewy exhibit strong investment value through stable growth and solid financial performance.
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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: 172.660
Low
175.00
Averages
191.95
High
210.00
Current: 172.660
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.
Philip Morris Lowers Annual Profit Forecast Amid Margin Pressures
- Profit Forecast Cut: Philip Morris CEO Jacek Olczak announced a reduction in the annual profit forecast due to margin pressures stemming from rising energy costs linked to the Iran conflict and currency fluctuations, indicating challenges as consumers tighten spending.
- Regulatory Environment Improvement: Speaking at the Deutsche Bank global consumer conference, Olczak noted that recent FDA moves to relax enforcement on unauthorized vaping and nicotine pouches are a 'net positive,' which not only reduces regulatory uncertainty for Zyn but should also support category growth.
- Stock Price Movement: Shares of Philip Morris fell about 1% before the market opened, reflecting investor concerns regarding the company's outlook, particularly in light of the lowered profit forecast, which may impact market confidence.
- Market Reaction Analysis: Despite facing profit pressures and stock declines, Olczak's comments suggest a positive outlook for future growth, especially with the improved regulatory environment potentially providing opportunities for market expansion of new products.
See More
Illicit Cigarette Consumption Hits 10.3% in EU by 2025
- Illicit Market Scale: In 2025, illicit cigarette consumption in the EU reached 41.8 billion cigarettes, accounting for 10.3% of total consumption, resulting in an estimated €16.7 billion in lost tax revenues, highlighting the severity of the issue and its impact on public finances.
- Counterfeit Dominance: Counterfeit cigarettes now represent 44% of the illicit market, totaling 18.3 billion cigarettes, with a year-on-year increase exceeding 20%, indicating organized crime's rapid adaptation in production and distribution, exacerbating regulatory challenges.
- Western Europe Pressure: France, Belgium, and the Netherlands are the most affected countries, with France's illicit share at 41.4%, significantly increasing enforcement difficulties and imposing substantial fiscal pressures on the state.
- Policy Response Recommendations: Philip Morris International calls for evidence-based coordinated responses to strengthen law enforcement and public-private cooperation, aiming to mitigate the impact of illicit trade through balanced regulation.
See More
Philip Morris Lowers 2026 EPS Guidance Amid Impairment Charge
- EPS Guidance Cut: Philip Morris has revised its 2026 full-year reported diluted EPS guidance to a range of $7.18 to $7.33, down from previous estimates, primarily due to a $500 million non-cash impairment charge at its Canadian affiliate.
- Adjusted Earnings Growth: Excluding a total adjustment of $1.13 per share, the forecast for adjusted diluted EPS is set at $8.31 to $8.46, representing a projected increase of 10.2% to 12.2% compared to $7.54 in 2025, indicating resilience amid challenges.
- Currency Impact Analysis: Driven by a stronger Russian ruble, Philip Morris anticipates a $0.20 per share unfavorable currency impact, yet expects overall revenue to reach $43.50 billion, showcasing the company's adaptability in global markets.
- Canadian Subsidiary Impairment: PMI's Canadian affiliate, RBH, is expected to record a non-cash impairment charge of approximately $500 million in Q2 2026, reflecting changes in industry dynamics, while its remaining carrying value is estimated to be less than $100 million.
See More
Philip Morris International Inc. 2026 Outlook and Investor Conference Highlights
- 2026 Performance Outlook: Philip Morris International anticipates a reported diluted EPS range of $7.18 to $7.33 for 2026, driven by strong growth in its international smoke-free business, particularly from the IQOS product line, with adjusted EPS expected to increase by 10.2% to 12.2%.
- New Product Launch: The ZYN portfolio is expanding with the introduction of ZYN ULTRA in 9mg and 11mg moist variants this month, available in a 20-pouch can format, priced lower than the flagship dry ZYN line, aimed at optimizing ZYN's price premium and increasing market share.
- Non-Cash Impairment Impact: PMI expects to record a non-cash impairment charge of approximately $500 million in Q2 2026, primarily due to the fair value of its investment in Canadian affiliate RBH being lower than its carrying value, impacting EPS by about 33 cents, reflecting changing industry dynamics.
- Market Risk Factors: The company faces various market risks, including regulatory restrictions, tax increases, and shifts in consumer preferences, which could significantly impact future performance, necessitating ongoing monitoring of market dynamics to adjust strategies.
See More
Republican Lawmakers Shift Investment Focus to Tech and Bitcoin
- Portfolio Shift: Republican lawmakers are experiencing a significant shift in their investment portfolios, particularly with increased investments in Intel (INTC) and Bitcoin (BTC-USD), reflecting President Trump's influence and potentially enhancing their competitiveness in the tech sector.
- ETF Performance: Republican investors tracking the ETF of GOP lawmakers have seen returns exceeding 20% year-to-date, while the Democratic ETF has only yielded 9%, indicating a relative advantage for Republicans in the market.
- Frequent Intel Trading: Since Trump's inauguration, Republican lawmakers have traded Intel stock nearly 50 times, with transaction values ranging from $525,000 to $1.8 million, and Intel's share in GOP portfolios has surged from 3% to 7.72%, indicating increased confidence in the company.
- Increased Bitcoin Investment: Bitcoin Trust ETF accounts for about 4% of GOP lawmakers' holdings, and Trump's support for the industry may further boost its popularity within the party, reflecting an optimistic outlook on future market structures.
See More
Top ETFs for Down Markets: Consistent Outperformance
- FDL Outperformance: The First Trust Morningstar Dividend Leaders ETF (FDL) gained approximately 3% during the 2022 bear market when the S&P 500 fell by 19%, demonstrating its ability to withstand market downturns effectively.
- Year-to-Date Returns: As of March 30, FDL rose about 15% while the S&P 500 dropped 7.3% and the Nasdaq Composite fell 10.5%, showcasing its strong resilience and attractiveness to investors in turbulent times.
- DHS Stable Returns: The WisdomTree U.S. High Dividend ETF (DHS) returned about 4% in 2022, significantly outperforming both the S&P 500 and Nasdaq, highlighting its stability during market corrections.
- Long-Term Performance: Currently, DHS has a year-to-date return of approximately 12% and around 24% over the past 12 months, with annualized returns of 11% and 10% over the past five and ten years, respectively, further validating its effectiveness as a diversification tool in investment portfolios.
See More
Philip Morris Lowers Annual Profit Forecast Amid Margin Pressures
- Profit Forecast Cut: Philip Morris CEO Jacek Olczak announced a reduction in the annual profit forecast due to margin pressures stemming from rising energy costs linked to the Iran conflict and currency fluctuations, indicating challenges as consumers tighten spending.
- Regulatory Environment Improvement: Speaking at the Deutsche Bank global consumer conference, Olczak noted that recent FDA moves to relax enforcement on unauthorized vaping and nicotine pouches are a 'net positive,' which not only reduces regulatory uncertainty for Zyn but should also support category growth.
- Stock Price Movement: Shares of Philip Morris fell about 1% before the market opened, reflecting investor concerns regarding the company's outlook, particularly in light of the lowered profit forecast, which may impact market confidence.
- Market Reaction Analysis: Despite facing profit pressures and stock declines, Olczak's comments suggest a positive outlook for future growth, especially with the improved regulatory environment potentially providing opportunities for market expansion of new products.
See More
Illicit Cigarette Consumption Hits 10.3% in EU by 2025
- Illicit Market Scale: In 2025, illicit cigarette consumption in the EU reached 41.8 billion cigarettes, accounting for 10.3% of total consumption, resulting in an estimated €16.7 billion in lost tax revenues, highlighting the severity of the issue and its impact on public finances.
- Counterfeit Dominance: Counterfeit cigarettes now represent 44% of the illicit market, totaling 18.3 billion cigarettes, with a year-on-year increase exceeding 20%, indicating organized crime's rapid adaptation in production and distribution, exacerbating regulatory challenges.
- Western Europe Pressure: France, Belgium, and the Netherlands are the most affected countries, with France's illicit share at 41.4%, significantly increasing enforcement difficulties and imposing substantial fiscal pressures on the state.
- Policy Response Recommendations: Philip Morris International calls for evidence-based coordinated responses to strengthen law enforcement and public-private cooperation, aiming to mitigate the impact of illicit trade through balanced regulation.
See More
Philip Morris Lowers 2026 EPS Guidance Amid Impairment Charge
- EPS Guidance Cut: Philip Morris has revised its 2026 full-year reported diluted EPS guidance to a range of $7.18 to $7.33, down from previous estimates, primarily due to a $500 million non-cash impairment charge at its Canadian affiliate.
- Adjusted Earnings Growth: Excluding a total adjustment of $1.13 per share, the forecast for adjusted diluted EPS is set at $8.31 to $8.46, representing a projected increase of 10.2% to 12.2% compared to $7.54 in 2025, indicating resilience amid challenges.
- Currency Impact Analysis: Driven by a stronger Russian ruble, Philip Morris anticipates a $0.20 per share unfavorable currency impact, yet expects overall revenue to reach $43.50 billion, showcasing the company's adaptability in global markets.
- Canadian Subsidiary Impairment: PMI's Canadian affiliate, RBH, is expected to record a non-cash impairment charge of approximately $500 million in Q2 2026, reflecting changes in industry dynamics, while its remaining carrying value is estimated to be less than $100 million.
See More
Philip Morris International Inc. 2026 Outlook and Investor Conference Highlights
- 2026 Performance Outlook: Philip Morris International anticipates a reported diluted EPS range of $7.18 to $7.33 for 2026, driven by strong growth in its international smoke-free business, particularly from the IQOS product line, with adjusted EPS expected to increase by 10.2% to 12.2%.
- New Product Launch: The ZYN portfolio is expanding with the introduction of ZYN ULTRA in 9mg and 11mg moist variants this month, available in a 20-pouch can format, priced lower than the flagship dry ZYN line, aimed at optimizing ZYN's price premium and increasing market share.
- Non-Cash Impairment Impact: PMI expects to record a non-cash impairment charge of approximately $500 million in Q2 2026, primarily due to the fair value of its investment in Canadian affiliate RBH being lower than its carrying value, impacting EPS by about 33 cents, reflecting changing industry dynamics.
- Market Risk Factors: The company faces various market risks, including regulatory restrictions, tax increases, and shifts in consumer preferences, which could significantly impact future performance, necessitating ongoing monitoring of market dynamics to adjust strategies.
See More
Republican Lawmakers Shift Investment Focus to Tech and Bitcoin
- Portfolio Shift: Republican lawmakers are experiencing a significant shift in their investment portfolios, particularly with increased investments in Intel (INTC) and Bitcoin (BTC-USD), reflecting President Trump's influence and potentially enhancing their competitiveness in the tech sector.
- ETF Performance: Republican investors tracking the ETF of GOP lawmakers have seen returns exceeding 20% year-to-date, while the Democratic ETF has only yielded 9%, indicating a relative advantage for Republicans in the market.
- Frequent Intel Trading: Since Trump's inauguration, Republican lawmakers have traded Intel stock nearly 50 times, with transaction values ranging from $525,000 to $1.8 million, and Intel's share in GOP portfolios has surged from 3% to 7.72%, indicating increased confidence in the company.
- Increased Bitcoin Investment: Bitcoin Trust ETF accounts for about 4% of GOP lawmakers' holdings, and Trump's support for the industry may further boost its popularity within the party, reflecting an optimistic outlook on future market structures.
See More
Top ETFs for Down Markets: Consistent Outperformance
- FDL Outperformance: The First Trust Morningstar Dividend Leaders ETF (FDL) gained approximately 3% during the 2022 bear market when the S&P 500 fell by 19%, demonstrating its ability to withstand market downturns effectively.
- Year-to-Date Returns: As of March 30, FDL rose about 15% while the S&P 500 dropped 7.3% and the Nasdaq Composite fell 10.5%, showcasing its strong resilience and attractiveness to investors in turbulent times.
- DHS Stable Returns: The WisdomTree U.S. High Dividend ETF (DHS) returned about 4% in 2022, significantly outperforming both the S&P 500 and Nasdaq, highlighting its stability during market corrections.
- Long-Term Performance: Currently, DHS has a year-to-date return of approximately 12% and around 24% over the past 12 months, with annualized returns of 11% and 10% over the past five and ten years, respectively, further validating its effectiveness as a diversification tool in investment portfolios.
See More
