Philip Morris International Inc. PM
Philip Morris International's smoke-free transformation is delivering genuine momentum: FY2025 revenue grew 7.3% to $40.6B with EPS surging 60.6% to $7.26, and the FDA's August 2026 authorization of 11 ZYN ULTRA nicotine pouch products extends the regulatory runway for a smoke-free segment that now exceeds 41% of revenues. Smart-money scores have recovered from -0.02 in Q3 2025 to 0.25 by Q2 2026, and the stock trades above both its 50-day ($187.07) and 200-day ($173.62) moving averages at $191.89.
However, at 27.6x earnings — a 38.7% premium to the peer median of 19.9x — with $48.8B in total debt against negative book equity of -$10.0B, the valuation and leverage profile leave little margin for error, keeping the risk/reward balanced rather than compelling at current levels.
What could go wrong
- Valuation compression. At 27.6x earnings and 7.03x sales — 38.7% and 53.4% above peer medians respectively — any deceleration in smoke-free adoption or EPS growth could trigger multiple contraction toward the 19.9x peer median.
- Balance sheet leverage. Total debt of $48.8B against negative stockholders' equity of -$10.0B creates structural fragility; rising rates or cash flow disruption could constrain the dividend growth and buyback program that support the premium multiple.
- Regulatory reversal. The August 2026 FDA authorization for 11 ZYN ULTRA pouches is a tailwind, but nicotine product regulations remain subject to revisitation, litigation, or tightening marketing restrictions that could slow the smoke-free transition.
- Combustible volume decline. While smoke-free products exceed 41% of revenues, the remaining cigarette business faces secular volume erosion that could dampen overall revenue growth if ZYN/IQOS adoption plateaus.
What would change my mind
Where this comes from: FMP annual fundamentals FY2025; derived_metrics FY2025 · Reuters and Business Wire news articles, 2026-08-21 · Seeking Alpha article, 2026-08-25 · smart_money points, as of 2026-06-30. Orin's read on PM; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All PM filings| Form | Filed | What it says | Read |
|---|---|---|---|
| 8-K | 18 Sep | — | on file |
| 8-K | 24 Aug | Philip Morris International Inc. | read |
| 10-Q | 24 Jul | For the six months ended June 30, 2026, Philip Morris International Inc. | read |
| 8-K | 22 Jul | Philip Morris International Inc. | read |
| 8-K | 29 Jun | Philip Morris International Inc. | read |
| 8-K/A | 16 Jun | Massimo Andolina's annual base salary as Group Chief Financial Officer will increase to CHF 1,050,010 ($1,324,483) effective August 1, 2026. | read |
| 8-K | 11 Jun | Philip Morris International Inc. | read |
| 8-K | 2 Jun | Philip Morris International Inc. | read |
Largest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Capital World Investors | $24.1B | 2.8% of fund |
| Vanguard Capital Management | $18.4B | 0.4% of fund |
| Capital Research Global Investors | $15.2B | 2.1% of fund |
| State Street | $10.1B | 0.3% of fund |
| Jpmorgan Chase & | $8.8B | 0.5% of fund |
| Fmr | $8.4B | 0.4% of fund |
146 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 49 Form 4 filings, net −$18.9M. Of the 49 on hand, 0 were open-market purchases and 7 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about PM
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 27.4× | 18.7× | 38.3× |
| EV/EBITDA | 18.7× | 14.5× | — |
| P/S | 6.99× | 4.94× | — |
Its P/E sits above all 5 of the last 5 years (+1.93σ from its own mean).
12.2%
free-cash-flow growth every year for 10 years, discounted at 10%, is what today’s price implies — starting from $10.7B of trailing free cash flow. It is an assumption the market is making, not a forecast Orin is making.
What Wall Street published
$212
$192 – $225 · +11% against today's price
- 17 buy or overweight
- 7 hold
- 1 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| PMPhilip Morris International Inc. | $297B | 27.4× | 18.7× | 67.5% | 25.6% | -112% |
| KOThe Coca-Cola Company | $379B | 26.5× | 20.7× | 61.9% | 28.6% | 43% |
| MOAltria Group, Inc. | $115B | 14.5× | 11.7× | 71.0% | 36.5% | -265% |
| PEPPepsiCo, Inc. | $178B | 17.0× | 11.8× | 54.0% | 10.8% | 50% |
| PGThe Procter & Gamble Company | $351B | 21.8× | 17.7× | 50.2% | 18.4% | 30% |
The median is of the 4 peers listed above and nothing else — check it against the column. This company trades 41.0% above it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Discounted cash flow
| Model | Fair value | Against | Computed |
|---|---|---|---|
| Standard DCF | $200 | $181.98 · +10% | 2026-06-10 |
| Levered DCF | $225 | $181.98 · +24% | 2026-06-10 |
The vendor’s intrinsic-value models. Treat them as a low-growth anchor — for a fast grower the market routinely pays well above a DCF. These were computed against the price in the “against” column, not today’s.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.