# Philip Morris International (PM.US)

Canonical: https://gigainvestors.com/s/PM

Analysis as of: 2026-10-16T07:31:15.308Z. Financial observations: FY2003–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $199.90 per share; close as of 2026-10-15.

Estimated value: low $85.95 per share, central $115.67 per share, high $135.02 per share. Buy at or below the central value $115.67 per share. Valuation as of 2026-10-16T07:31:15.308Z; scenarios are not confidence intervals.

Expected annual return: 7.1% at the stated quote. About 7.1% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.25×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.40×

- FY2018: 0.38×

- FY2019: 0.35×

- FY2020: 0.41×

- FY2021: 0.09×

- FY2022: 0.39×

- FY2023: 0.33×

- FY2024: 0.35×

- FY2025: 0.37×

- LTM to Jun 2026: 0.38×

### moat: pass

- ROIC, median of available years: 84.9%

- ROIC, second-lowest year: 62.1%

- Typical minus recent gross margin: -2.7 pp

- Typical gross margin (annual median): 64.4%

- Recent gross margin (lower of latest and 3-year median): 67.1%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.7%

- ROIC including acquisitions, ten-year median: 37.2%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: >100%

- FY2018: >100%

- FY2019: >100%

- FY2020: >100%

- FY2021: 62.1%

- FY2022: 87.7%

- FY2023: 53.5%

- FY2024: 82.2%

- FY2025: 72.4%

- LTM to Jun 2026: 72.4%

### economics: pass

- Owner earnings / net income, 5-yr: 1.02×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $38B

- Net income, five-year total: $37B

- Return on incremental invested capital: 113.2%

- Working capital / revenue, annual change: -1.1 pp

- Working capital / revenue, change between three-year averages: -7.1 pp

- Working capital / revenue, final three-year average: 30.0%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.93×

- FY2022: 1.00×

- FY2023: 1.01×

- FY2024: 1.05×

- FY2025: 1.04×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 158.6% vs 72.4%

- Per-share earnings: 4.44 to 5.02 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.1%

- Ordinary dilution, 5-year annual growth: 0.0%

- Market cap gain: $108B

- Cumulative retained earnings: $5.0B

- Diluted shares, 10-year annual growth: 0.1%

- Diluted shares, 5-year annual growth: 0.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 1.5%

- Per-share value change: $0.58

- Per-share value, starting three-year median: $4.44

- Per-share value, ending three-year median: $5.02

- Buybacks concentrated in cheaper years (correlation): -1.00

- Average buyback yield: 0.2%

- Buyback history: 3 years

- Debt-funded buybacks: No

- Acquisition spending: $20B

- Cumulative net income, 10 years: $74B

- ROIC, first three-year median: >100%

- ROIC, last three-year median: 72.4%

Chart: Earnings per share; fiscal year observations.

- FY2016: $4.49

- FY2017: $3.89

- FY2018: $5.09

- FY2019: $4.62

- FY2020: $5.17

- FY2021: $1.43

- FY2022: $5.83

- FY2023: $5.02

- FY2024: $4.52

- FY2025: $7.28

### accounting: pass

- Sloan accruals: -1.3%

- Receivables to sales index (DSRI): 1.16×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.08×

- Accounting red flags: 0

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.0%

- FY2017: -6.7%

- FY2018: -3.9%

- FY2019: -6.8%

- FY2020: -3.9%

- FY2021: -23.6%

- FY2022: -2.8%

- FY2023: -2.2%

- FY2024: -8.4%

- FY2025: -1.3%

## Holders

- [David Hoeft](https://gigainvestors.com/DAC): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Terry Smith](https://gigainvestors.com/FS): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Russo](https://gigainvestors.com/GR): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Bill Nygren](https://gigainvestors.com/HA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Thomas Gayner](https://gigainvestors.com/MKL): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Andrew Adams](https://gigainvestors.com/MPF): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Christopher Bloomstran](https://gigainvestors.com/SA): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Donald Yacktman](https://gigainvestors.com/YAM): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 12.7% a year for ten years · "Philip Morris Raises FX Outlook as IQOS, ZYN Fuel Smoke-Free Growth" (finance.yahoo.com, Sep 2026) · sales +4.7%

Story as of 2026-10-16T09:59:25.057Z; price observation 2026-10-15.

Price needs cash profits to grow 12.7% a year for ten years

- 2025-04-23: Marlboro maker Philip Morris lifts annual profit forecast on strong ZYN business ([finance.yahoo.com](https://finance.yahoo.com/news/marlboro-maker-philip-morris-lifts-120909319.html))

- 2025-07-22: Philip Morris Shares Drop 7% on Lower-Than-Expected Volumes of Zyn Pouches ([finance.yahoo.com](https://finance.yahoo.com/m/f93a2602-9a6e-3ad6-9ba5-4164322862f6/philip-morris-shares-drop-7%25.html))

- 2025-10-21: Philip Morris Tops Quarterly Views, Flags Slower Growth in Fourth Quarter; Shares Fall ([finance.yahoo.com](https://finance.yahoo.com/news/philip-morris-tops-quarterly-views-175216367.html))

- 2026-02-27: Argus Raises Philip Morris (PM) Outlook on Rising Contribution from Nicotine Pouches ([finance.yahoo.com](https://finance.yahoo.com/news/argus-raises-philip-morris-pm-150720087.html))

- 2026-06-02: Philip Morris Shares Ease After Company Trims 2026 Earnings Outlook (PM) ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/philip-morris-shares-ease-company-111241259.html))

- 2026-07-22: Philip Morris Q2 Earnings Beat Estimates, Organic Sales Rise 7.6% Y/Y ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/philip-morris-q2-earnings-beat-152600706.html))

### Sales · FY2025–2026

sales +4.7%; source https://www.sec.gov/Archives/edgar/data/1413329/000162828026005939/pm-20251231.htm; observed 2026-02-06.

- FY2017: $29B 

- FY2018: $30B 

- FY2019: $30B 

- FY2020: $29B 

- FY2021: $31B 

- FY2022: $32B 

- FY2023: $35B 

- FY2024: $38B 

- FY2025: $41B 

- FY2026: $43B 

### Gross margin · FY2026

gross margin 67.5%; source https://www.sec.gov/Archives/edgar/data/1413329/000162828026005939/pm-20251231.htm; observed 2026-02-06.

- FY2017: 63.7% 

- FY2018: 63.7% 

- FY2019: 64.7% 

- FY2020: 66.7% 

- FY2021: 16.9% 

- FY2022: 64.1% 

- FY2023: 63.3% 

- FY2024: 64.8% 

- FY2025: 67.1% 

- FY2026: 67.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in tobacco; annual sales are USD 40.6 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1413329/000162828026005939/pm-20251231.htm (filed 2026-02-06); FY2025: revenue 40648000000; grossProfit 27282000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); PM.US: Philip Morris International Inc. operates as a tobacco company. The company offers cigarettes and smoke-free products, including heat-not-burn, e-vapor, and oral nicotine products under the IQOS, VEEV, and ZYN brands; and consumer accessories, such as lighters and matches. It also offers wellness products. The company was incorporated in 1987 and is headquartered in Stamford, Connecticut.

### Why customers stay

Margins ranged from 63.3% to 67.1% during 2023–25; it earns 84.9% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2023: grossProfit / revenue = 63.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2024: grossProfit / revenue = 64.8%.

- Source: https://www.sec.gov/Archives/edgar/data/1413329/000162828026005939/pm-20251231.htm (filed 2026-02-06); FY2025: grossProfit / revenue = 67.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); 10-year return on capital observations [[2017,1.2254723127035831],[2018,1.5862910546752573],[2019,1.2033341333030243],[2020,1.6035383560100496],[2021,0.6214847276907468],[2022,0.8768088239458556],[2023,0.5347421488909061],[2024,0.8216389028490021],[2025,0.7241777206904749],[2026,0.7238938544441959]]; median 0.8492238633974288. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2016: growth capex 0; upkeep 1172000000; owner earnings 6538000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2017: growth capex 459645829.5562756; upkeep 1088354170.4437244; owner earnings 5821645829.556275. Growth capex / owner earnings = 0.07895461919422703.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2018: growth capex 200079846.02598333; upkeep 1235920153.9740167; owner earnings 7664079846.025984. Growth capex / owner earnings = 0.026106179743120725.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2019: growth capex 0; upkeep 852000000; owner earnings 7297000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2020: growth capex 0; upkeep 602000000; owner earnings 8435000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2021: growth capex 616317843.5589718; upkeep 131682156.44102824; owner earnings 2078317843.558972. Growth capex / owner earnings = 0.2965464813137394.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2022: growth capex 0; upkeep 1077000000; owner earnings 9048000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2023: growth capex 0; upkeep 1321000000; owner earnings 7868000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); FY2024: growth capex 0; upkeep 1444000000; owner earnings 7377000000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1413329/000162828026005939/pm-20251231.htm (filed 2026-02-06); FY2025: growth capex 0; upkeep 1569000000; owner earnings 11775000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); Dividend observations: [[2016,6378000000],[2017,6520000000],[2018,6885000000],[2019,7161000000],[2020,7364000000],[2021,7580000000],[2022,7812000000],[2023,7964000000],[2024,8197000000],[2025,8624000000]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 0.2% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); PM.US SharesStats.PercentInsiders = 0.164 percentage points; cache date 2026-10-16.

### What could break it

"Litigation related to tobacco and nicotine products could substantially reduce our profitability" (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1413329/000162828026005939/pm-20251231.htm (filed 2026-02-06); Litigation related to tobacco and nicotine products could substantially reduce our profitability

### What the price says

The price assumes cash profits grow 12.7% yearly over ten years; actual growth was 5.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-06); Ten-year compound average after fade. Initial solved rate 0.2273717962899301. Price 199.9; FX 1; discount 0.1; same compounder ten-year fade to terminal 0.03. FY2015 owner earnings/share 4.304067140090381 → FY2025 7.557766367137355. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $96.44 per share

- 2016-11: $88.28 per share

- 2016-12: $91.49 per share

- 2017-01: $96.13 per share

- 2017-02: $109.35 per share

- 2017-03: $112.90 per share

- 2017-04: $110.84 per share

- 2017-05: $119.80 per share

- 2017-06: $117.45 per share

- 2017-07: $116.71 per share

- 2017-08: $116.93 per share

- 2017-09: $111.01 per share

- 2017-10: $104.64 per share

- 2017-11: $102.75 per share

- 2017-12: $105.65 per share

- 2018-01: $107.23 per share

- 2018-02: $103.55 per share

- 2018-03: $99.40 per share

- 2018-04: $82.00 per share

- 2018-05: $79.54 per share

- 2018-06: $80.74 per share

- 2018-07: $86.30 per share

- 2018-08: $77.89 per share

- 2018-09: $81.54 per share

- 2018-10: $88.07 per share

- 2018-11: $86.53 per share

- 2018-12: $66.76 per share

- 2019-01: $76.72 per share

- 2019-02: $86.94 per share

- 2019-03: $88.39 per share

- 2019-04: $86.56 per share

- 2019-05: $77.13 per share

- 2019-06: $78.53 per share

- 2019-07: $83.61 per share

- 2019-08: $72.09 per share

- 2019-09: $75.93 per share

- 2019-10: $81.44 per share

- 2019-11: $82.93 per share

- 2019-12: $85.09 per share

- 2020-01: $82.70 per share

- 2020-02: $81.87 per share

- 2020-03: $72.96 per share

- 2020-04: $74.60 per share

- 2020-05: $73.36 per share

- 2020-06: $70.06 per share

- 2020-07: $76.81 per share

- 2020-08: $79.79 per share

- 2020-09: $74.99 per share

- 2020-10: $71.02 per share

- 2020-11: $75.75 per share

- 2020-12: $82.79 per share

- 2021-01: $79.65 per share

- 2021-02: $84.02 per share

- 2021-03: $88.74 per share

- 2021-04: $95.00 per share

- 2021-05: $96.43 per share

- 2021-06: $99.11 per share

- 2021-07: $100.09 per share

- 2021-08: $103.00 per share

- 2021-09: $94.79 per share

- 2021-10: $94.54 per share

- 2021-11: $85.94 per share

- 2021-12: $95.00 per share

- 2022-01: $102.85 per share

- 2022-02: $101.07 per share

- 2022-03: $93.94 per share

- 2022-04: $100.00 per share

- 2022-05: $106.25 per share

- 2022-06: $98.74 per share

- 2022-07: $97.15 per share

- 2022-08: $95.49 per share

- 2022-09: $83.01 per share

- 2022-10: $91.85 per share

- 2022-11: $99.67 per share

- 2022-12: $101.21 per share

- 2023-01: $104.24 per share

- 2023-02: $97.30 per share

- 2023-03: $97.25 per share

- 2023-04: $99.97 per share

- 2023-05: $90.01 per share

- 2023-06: $97.62 per share

- 2023-07: $99.72 per share

- 2023-08: $96.06 per share

- 2023-09: $92.58 per share

- 2023-10: $89.16 per share

- 2023-11: $93.36 per share

- 2023-12: $94.08 per share

- 2024-01: $90.85 per share

- 2024-02: $89.96 per share

- 2024-03: $91.62 per share

- 2024-04: $94.94 per share

- 2024-05: $101.38 per share

- 2024-06: $101.33 per share

- 2024-07: $115.16 per share

- 2024-08: $123.29 per share

- 2024-09: $121.40 per share

- 2024-10: $132.70 per share

- 2024-11: $133.06 per share

- 2024-12: $120.35 per share

- 2025-01: $130.20 per share

- 2025-02: $155.28 per share

- 2025-03: $158.73 per share

- 2025-04: $171.36 per share

- 2025-05: $180.59 per share

- 2025-06: $182.13 per share

- 2025-07: $164.05 per share

- 2025-08: $167.13 per share

- 2025-09: $162.20 per share

- 2025-10: $144.33 per share

- 2025-11: $157.48 per share

- 2025-12: $160.40 per share

- 2026-01: $179.44 per share

- 2026-02: $186.83 per share

- 2026-03: $165.34 per share

- 2026-04: $165.07 per share

- 2026-05: $177.38 per share

- 2026-06: $180.91 per share

- 2026-07: $190.82 per share

- 2026-08: $187.30 per share

- 2026-09: $190.82 per share

- 2026-10: $199.29 per share

## Annual estimated value (USD per share)

- FY2016: low $51.20 per share, central $58.03 per share, high $67.12 per share

- FY2017: low $56.78 per share, central $64.01 per share, high $73.65 per share

- FY2018: low $60.96 per share, central $73.86 per share, high $85.56 per share

- FY2019: low $60.32 per share, central $72.39 per share, high $83.87 per share

- FY2020: low $54.45 per share, central $61.64 per share, high $71.23 per share

- FY2021: low $55.92 per share, central $63.35 per share, high $73.25 per share

- FY2022: low $58.03 per share, central $66.23 per share, high $76.92 per share

- FY2023: low $60.61 per share, central $68.97 per share, high $80.09 per share

- FY2024: low $63.20 per share, central $73.37 per share, high $85.43 per share

- FY2025: low $80.17 per share, central $108.57 per share, high $127.07 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:36:59.812Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1413329/000162828026005939/pm-20251231.htm); period 2025-12-31, filed 2026-02-06.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.