Philip Morris: Structural Growth Continuing in Q1; Likely Trump-Proof
Company Update (PM US) (Buy): Shares are near a new all-time high, but still attractive with a ~23x P/E.
Highlights
Dollar growth of 5.8% in revenues, 12.8% in EBIT and 13.1% in EPS.
U.S. ZYN consumer offtake volume grew 15% but shipments grew 53%.
2025 outlook raised to show Adjusted EPS growing 12-14% in dollars.
We see PM as a largely Trump-proof stock given its exposure and portfolio.
At $170.24, we see a 57% total return (13.7% p.a.) by 2028 year-end. Buy.
Introduction
We review our Buy rating on Philip Morris (“PM”) after Q1 2025 results were released last Wednesday (April 23). PM shares have risen 3.7% in the 3 days since results, and are now 78.1% higher than a year ago:
PM Share Price (Last 1 Year)
Source: Google Finance (27-Apr-25).
PM is the largest position in our “Select 15” model portfolio, having been part of the portfolio since inception at the start of 2023 and a top-5 position since September 2023. We initiated a Buy rating on PM when we first published our research on the company in June 2019, and shares have gained 120% since. PM is also our largest holding in real life.
Q1 2025 results show PM’s structural growth is continuing. It is likely to remain immune from the macro shock caused by new U.S. tariffs and other Trump policies. Shares are attractive with a ~23x P/E and 3.2% Dividend Yield.
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