Here's Why Philip Morris Raises Its 2025 EPS Guidance Again

Philip Morris International PM once again raised its 2025 earnings per share (EPS) guidance following a strong second-quarter performance, driven largely by the continued profitability of the smoke-free portfolio. The company expects an adjusted EPS of $7.43-$7.56, up from the prior stated $7.36-$7.49, indicating 13-15% year-over-year growth.In the second quarter of 2025, smoke-free net revenues rose 15.2% year over year, while gross profit for the segment jumped more than 23%. This higher-margin portfolio now contributes 41% to Philip Morris’ total net revenues and 42% to gross profit, marking it as a key driver of earnings momentum.Growth was broad-based across the company’s multi-category smoke-free platform. IQOS delivered a solid quarter, with adjusted in-market sales of heated tobacco units rising 11.4%, supported by global expansion and recovery in Europe’s markets like Italy. ZYN also posted a strong rebound, with U.S. consumer offtake up 26% in the quarter and 36% in June, driven by improved in-store availability and renewed commercial activity.Importantly, PM delivered 16.1% adjusted operating income growth in the quarter, significantly outpacing revenue gains. This performance reflects a combination of strong pricing, improved scale efficiencies and a favorable category mix, particularly the shift toward higher-margin smoke-free products. The raised guidance indicates management’s confidence that the recent acceleration in smoke-free category growth is sustainable. It signals a belief that the company’s multi-category strategy is gaining traction more quickly than anticipated, supported by strengthening demand.Philip Morris & Competitor’s Smoke-Free StrategiesBoth Altria Group, Inc. MO and Turning Point Brands, Inc. TPB are actively expanding their smoke-free portfolios, though with different scales and specific focuses. Altria's primary driver in this segment is its "on!" nicotine pouch brand, which saw an 18% increase in shipment volume to more than 39 million cans in the first quarter of 2025, expanding the share of the oral tobacco category to 8.8%. To support long-term growth in the modern oral segment, Altria continues to invest in distribution and awareness.In contrast, Turning Point Brands is demonstrating aggressive growth in its modern oral nicotine pouch sales (FRE and ALP), which increased nearly tenfold year over year in the first quarter of 2025, contributing $22.3 million in revenues. TPB has significantly raised its full-year nicotine pouch sales guidance to a range of $80 million to $95 million. Turning Point Brands is making substantial investments in sales, marketing and potential U.S. manufacturing for its white pouch brands to achieve a significant market share in a category projected to exceed $5 billion.PM’s Price Performance, Valuation & EstimatesShares of Philip Morris have lost 10.2% in the past month compared with the industry’s decline of 2.2%. Image Source: Zacks Investment Research From a valuation standpoint, PM trades at a forward price-to-earnings ratio of 20.16X, up from the industry’s average of 14.67X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for PM’s 2025 and 2026 earnings implies year-over-year growth of 14.2% and 11.9%, respectively. Image Source: Zacks Investment Research Philip Morris currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Altria Group, Inc. (MO): Free Stock Analysis Report Philip Morris International Inc. (PM): Free Stock Analysis Report Turning Point Brands, Inc. (TPB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks