Philip Morris International Inc (NYSE:PM) is slated to report earnings before the market opens on October 19, when investors will get another chance to evaluate the company’s smoke-free product business.
The Marlboro parent is expected to post earnings of $1.61 per share on revenue of $9.17 billion, compared to $1.34 per share on revenue of $8.03 billion a year earlier.
The smoke-free product business made up more than 35% of Philip Morris' net revenues in the second quarter. That number could continue to grow after the company upped its stake last year in Swedish Match, which produces wet snuff snus products and tobacco-free nicotine ZYN pouches, to 93%.
However, some of the movement normally expected from quarterly results might already be priced in, analysts at Jefferies said, thanks to an investor day Philip Morris held last month.
“Given PM's very recent [capital markets day], as well as updated guides, we expect 3Q23 to largely be a non-event,” the analysts wrote.
Additionally, Jefferies is somewhat down on the launch of IQOS, a line of heated tobacco and electronic cigarette products. Philip Morris signaled at its investor day that the rollout would be slower than previously expected.
“From a long-only perspective, while PM is generally the most favored name across the tobacco space due to much greater conviction in its [reduced risk products) business, for any sizable incremental inflows over the next 12-18 months, we felt it needed another leg of the RRP story,” the analysts wrote.
“From a fast-money perspective, we see little appetite near-term for the name from conversations we have had,” they added.
Ultimately, Jefferies maintained its Buy rating and lowered its price target to $105 from $111.
Shares of Philip Morris traded 0.2% lower Wednesday afternoon to $93.25.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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