On Tuesday, Stifel reiterated its Buy rating on shares of Philip Morris International (NYSE:PM), maintaining a $138.00 price target for the company. The decision follows Philip Morris International's recent earnings report for the third quarter of 2024, where the company showcased an 18% growth in earnings per share (EPS) on a constant currency basis.
Philip Morris reported a third-quarter EPS of $1.91, surpassing expectations by $0.07, despite facing a $0.06 incremental foreign exchange drag that was not anticipated. The company's organic revenue increased by 11.6%, bolstered by a 2.9% rise in volume and an 8.7% boost from price mix. This performance was reflected in a 13.8% increase in operating profit on a constant currency basis, with the underlying margin expanding by 90 basis points.
The tobacco company has also updated its guidance for the year 2024, now anticipating around 9.5% organic revenue growth, up from the previous forecast of 7.5%-9%. Moreover, the expected growth in organic operating income has been adjusted to a range of 14-14.5%, an increase from the prior estimate of 11%-13%. Philip Morris also projects constant currency EPS growth to be between 14-15%, revised upwards from the earlier 11%-13% range.
In line with the company's performance and updated forecasts, Philip Morris has raised the lower end of its projected shipments for ZYN in the U.S. market, now expecting to ship between 570 to 580 million cans of the smokeless tobacco product. Stifel's analyst expressed continued support for the company's stock with the firm's Buy rating and target price of $138.00, reflecting confidence in Philip Morris's growth trajectory and financial health.
In other recent news, Philip Morris International Inc (NYSE:PM). has reported significant growth in its smoke-free product line, driven by strong demand for its ZYN nicotine pouches and IQOS heated tobacco device.
The company reported a 1.3% rise in consolidated cigarette shipment volumes for the quarter and increased its annual profit forecast for the fiscal year 2024. The adjusted earnings per share are now expected to range between $6.85 and $6.91, a notable increase from the previously projected range.
In legal developments, Philip Morris, British American Tobacco (NYSE:BTI), and Japan Tobacco (OTC:JAPAF) have agreed to a C$32.5 billion ($23.6 billion) settlement in a Canadian lawsuit over insufficient warnings about the cancer risks associated with their products.
On the analyst front, Deutsche Bank (ETR:DBKGn) and Goldman Sachs (NYSE:GS) have expressed confidence in the company's future growth. Deutsche Bank raised the company's price target to $135, while Goldman Sachs increased its price target to $140, both maintaining a Buy rating on the stock.
Philip Morris also announced the sale of its subsidiary Vectura Group Ltd. to Molex Asia Holdings Ltd., a strategic shift that allows Vectura to operate independently. These are the recent developments in Philip Morris International Inc.'s business.
InvestingPro Insights
Philip Morris International's strong performance and positive outlook are further supported by recent data from InvestingPro. The company's market capitalization stands at an impressive $184.96 billion, reflecting its significant position in the tobacco industry.
InvestingPro Tips highlight Philip Morris's financial strength and shareholder-friendly policies. The company has raised its dividend for 16 consecutive years and maintained dividend payments for 17 years, demonstrating a commitment to returning value to shareholders. This is particularly noteworthy given the company's recent 18% EPS growth and increased guidance for 2024.
The company's financial metrics also paint a positive picture. Philip Morris boasts impressive gross profit margins, with the latest data showing a gross profit margin of 63.87% for the last twelve months as of Q2 2024. This aligns with the company's strong pricing power and efficient operations, as evidenced by the 8.7% boost from price mix reported in the recent earnings.
Moreover, Philip Morris has seen a substantial price uptick over the last six months, with InvestingPro data showing a 29.56% price total return over this period. This stock performance correlates with the company's robust financial results and improved guidance for 2024.
For investors seeking more comprehensive analysis, InvestingPro offers 10 additional tips for Philip Morris International, providing deeper insights into the company's financial health and market position.
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