From Tobacco Titan To Smoke-Free Pioneer: How Philip Morris Is Lighting Up Its Future Prospects

Tobacco giant Philip Morris International Inc PM provided 2024-2026 growth expectations at its 2023 Investor Day.

The company expects 2024 to 2026 compound annual growth for organic net revenue of 6% to 8% (including higher shipment volumes), adjusted operating income of 8% to 10%, and adjusted EPS (excluding currency) of 9% to 11%. 

For 2026, the company targets its heated tobacco unit shipment volume of 180 to 200 billion units and nicotine pouch shipment volume of 800 million to 1 billion cans.

In particular, during 2024-2026, PM anticipates its ZYN brand to drive double-digit net revenue and adjusted OI compound annual growth for its overall U.S. operations, including the impact of IQOS investments.

Moreover, the company aims to generate over two-thirds of its net revenues from smoke-free products in 2030.

"Our ambitious 2024 to 2026 targets reflect our confidence in the future, underpinned by our two leading smoke-free brands – IQOS and ZYN – as well as continued innovation, with significant opportunities for further growth over the coming years – both in the U.S. and internationally. By 2030, our ambition is to be a substantially smoke-free company, with over two-thirds of our total net revenues coming from smoke-free products. We see a realistic path to becoming a smoke-free company over time, and this will be achieved market-by-market – as we are already demonstrating today," said Jacek Olczak, CEO.

In July, the company revised its FY23 outlook for adjusted EPS to $6.13 - $6.22 vs. consensus of $6.22. 

Also Read: Tobacco Giant Philip Morris Rethinks Pharma Dive, Mulls Vectura Stake Sale Amid Challenges: Report

Price Action: PM shares closed lower by 0.82% at $90.32 on Wednesday.