How Is Philip Morris' Stock Performance Compared to Other Consumer Staples Stocks

Consumer Defensive - Philip Morris International Inc logo with stock info -by Piotr Swat via Shutterstock

Philip Morris International Inc. (PM), headquartered in Stamford, Connecticut, is renowned as an international tobacco company actively delivering a smoke-free future and evolving its portfolio to include products outside of tobacco and nicotine. Valued at $161.07 billion by market cap, the company’s current product portfolio primarily consists of cigarettes and smoke-free products. 

Companies worth $10 billion or more are generally described as “large-cap stocks,” and PM fits right into that category, signifying its substantial size, stability, and dominance in its industry. The company is using innovation to meet regulatory standards by replacing cigarettes with smoke-free products.

The Marlboro seller has fallen 1.2% from its 52-week high of $104.90, which it hit on Jun. 6. Shares of PM are up 11.9% over the past three months, outperforming the S&P 500 Cons Staples Sector SPDR’s (XLP) 3.3% gains over the same time frame.

Longer term, PM shares rose 12% over the past year, and in 2024, the stock is up 10.2%. By contrast, the XLP is up 7.7% on a YTD basis and 6.1% over the past 52 weeks.

To confirm the bullish price trend, PM has been trading above both its 50-day and 200-day moving averages since mid-April.

On Apr. 23, PM reported its Q1 results. Net income was $2.15 billion, and adjusted EPS was $1.50, beating the consensus estimate of $1.41. The company expects full-year earnings to come between $6.19 and $6.31. PM’s shares rose more than 3% after the results were released.

PM’s recent outperformance can be attributed to the anticipated launch of IQOS, its flagship heated tobacco device in the U.S. IQOS is the latest and most innovative addition to its portfolio of smoke-free products. A Reuters report mentioned that PM was looking to launch its IQOS device in Austin, Texas, citing job advertisements on LinkedIn. The company plans to launch the product in four U.S. cities in two states this year, with a broader roll-out expected in 2025. The heated tobacco market in the U.S. is nearly non-existent, and IQOS’ launch could help garner new users for the company.

Rival Altria Group, Inc. (MO) has outperformed PM with 15.3% gains on a YTD basis. However, PM’s double-digit returns over the past 52 weeks compare to MO’s 2.8% gains over this period.

With its recent outperformance compared to other consumer staples stocks, analysts remain optimistic about PM’s prospects. The stock has a consensus rating of “Moderate Buy” from the 14 analysts covering it, but the mean price target of $106.67 is a 2.9% premium to current levels.

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On the date of publication, Dipanjan Banchur did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.