Philip Morris (PM) Stock Forecast & Price Target

Philip Morris International (PMI) is projected to maintain strong organic revenue growth of 6% to 8% over the next two years, bolstered by its continued market share gains, especially in the smoke-free product category. The recent acquisition of Swedish Match enhances PMI's position as a leader in both traditional and reduced-risk products, including the dominant Iqos and Zyn brands in their respective markets. Enhanced volume capacity is expected to facilitate more aggressive marketing efforts aimed at expanding their consumer base, paving the way for further market penetration and sustained revenue growth.

Philip Morris International's outlook has become increasingly negative due to a contraction in smoke-free revenue and profit contributions sequentially, alongside a marked slowdown in overall revenue growth driven by the performance of nicotine pouches. The anticipated normalization of combustible volumes to a low-single-digit decline indicates challenges in sustaining profitability in core product areas. Additionally, the recent revenue miss and softer-than-expected performance in the U.S. market further highlight the potential pressures on gross margins and earnings moving forward.