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Philip Morris International Inc. (PM) stock analysis

Philip Morris trades near its all-time high after a Q3 beat, with a rich multiple and low implied volatility

PM closed at 202.62 on Oct 27, 2026, 3.72% below its 210.45 high, after a third-quarter EPS beat of 2.61% on Oct 21. Its forward P/E of 22.31 (on next year's consensus EPS) sits in the 79th percentile of US Consumer Staples. Operating margin of 38.62% and ROIC of 39.96% are far above sector medians, but negative equity and a high payout ratio are counterweights.

  • Price: 202.62
  • Market Cap (USD): $316.66B
  • P/E: 29.57×
  • Fwd P/E: 22.31×
  • Div Yield: 2.97%
  • 1Y Return: 28.55%
  • Mean Target: 209.50
  • Rating: Strong Buy

Bull case

  • Revenue grew 7.87% year over year on a trailing basis, in the 80th percentile of US Consumer Staples, against a sector median of 3.78%.
  • Operating margin is 38.62% (98th percentile; sector median 12.34%) and ROIC is 39.96% (sector median 15.32%), which points to high business quality.
  • Price is 11.76% above the 200-day average of 181.29, and the 50-day average is 6.53% above the 200-day, with a relative strength rating of 85.

Bear case

  • The forward P/E of 22.31 compares with an industry median of 12.44 and a sector median of 15.65, and the PEG ratio is 2.53, so growth expectations are already priced in.
  • The payout ratio is 87.74% and total equity is -7.94B against 47.56B of total debt, which leaves limited room for error.
  • Latest quarterly EPS growth was -4.93% year over year, and the Q3 earnings coverage includes a WSJ headline 'Philip Morris Profit Falls, Despite Higher Sales' plus commentary on rising ZYN spending.

What to watch

  • Price versus the 52-week and all-time high of 210.45, set 8 days before Oct 27, 2026.
  • The 20-day average at 197.84 and the 50-day average at 193.13 as nearby support references.
  • Options expiry on Nov 27, 2026; no earnings fall before it, and no ex-dividend date is listed before it.
  • Short interest updates after the Oct 15, 2026 reading of 17.3M shares (1.11% of float).

General

Philip Morris International is a holding company focused on delivering a smoke-free future, with operations across Europe, Asia, Middle East, Africa and the Americas. Shares are near record highs after Q3 results. Quality metrics are strong, but the valuation is above peers and leverage is notable.

Business and results

In 2025, Combustible Products were 58.54% of revenue and Reduced-Risk Products 41.46%. The European Union contributed 42.10%. Trailing revenue is $43.14B with net income of 10.71B. Q3 FY2026 revenue was 11.44B with diluted EPS of 2.12, and the Oct 21 report beat EPS consensus by 2.61%.

Valuation in context

The trailing P/E is 29.57 and the forward P/E is 22.31 on next year's consensus EPS, in the 79th percentile of the sector versus a median of 15.65. The free cash flow yield is 4.29% against a sector median of 5.67%. The dividend yield is 2.97%.

Analysts and market signals

As of Oct 28, 2026 the consensus table shows 18 Buy, 6 Hold and 1 Sell ratings. The mean target of 209.50 (4 targets) is 3.40% above the price. Argus Research raised its target to 220 from 210 on Oct 26; UBS lifted its target to 201 from 193 on Oct 22.

Long-term investor

Growth, margins and returns on capital are well above sector norms, and the dividend has risen for 13 years. The trade-offs are a premium multiple, a payout ratio near 88% and a balance sheet with negative equity. Net debt of 2.18 times EBITDA looks manageable.

Growth durability

Revenue rose from 31.76B in 2022 to 40.65B in 2025, with a 3-year CAGR of 8.57%. Diluted EPS was 7.26 in 2025 versus 4.52 in 2024, though 2024 was depressed, and the 3-year EPS CAGR is 7.71%. Next year's EPS growth is estimated at 8.80%.

Margins and balance sheet

Gross margin is 67.74% and operating margin 38.62%, up 1.57% over the past year. ROIC is 39.96%. Net debt is 40.88B, or 2.18 times EBITDA, with interest coverage of 10.98 times. The current ratio is 1.02 and the quick ratio 0.61.

Cash returns and ownership

Dividends paid were 8.62B in 2025 versus free cash flow of 10.66B, and the trailing payout ratio is 87.74%. The last quarterly dividend was 1.6 per share, up from 1.47. No buybacks were recorded in 2024 or 2025. Institutions own 84.20%, and no insider buys or sells appeared in the last 90 days.

Swing trader

The trend is up, with price above the 20, 50 and 200-day averages, but momentum has flattened. The MACD sits on its signal line and ADX of 16.51 signals a weak trend. Price is consolidating below the 210.45 high.

Trend and momentum

Price of 202.62 is 2.41% above the 20-day average (197.84), 4.92% above the 50-day (193.13) and 11.76% above the 200-day (181.29). RSI is 57.67, MACD is 2.73 against a signal of 2.74, and ADX is 16.51. The golden cross dated Feb 17, 2026 remains in place.

Recent sessions and levels

On Oct 15 the stock reversed from a 210.45 high to close at 199.9 on 8.0M shares. Oct 21, earnings day, ranged 184 to 197.83 and closed at 197.46, then recovered to 201.74 the next day. Resistance is 210.45; the 20-day low is 184.00.

Risk and flow

ATR is 5.15, or 2.54% of price. Short interest was 17.3M shares (1.11% of float) on Oct 15, down 2.50%. UBS reiterated Neutral on Oct 22; Argus raised its target to 220. Volume on Oct 27 was 0.77 times average.

Options

Implied volatility is low relative to its own history, with an IV rank of 25 and an IV percentile of 12, and in line with realized volatility. Options liquidity is decent and call flow dominates. No earnings event falls inside the 30-day expiry.

Volatility level

30-day implied volatility is 24.59% versus a 52-week range of 17.47% to 45.78%. It fell 7.5 points over 20 days. The IV/HV ratio is 0.99 and the volatility risk premium is -4.1 points (ratio 0.86), so premium is not rich relative to realized volatility.

Term structure and expected move

Term structure is in contango, with 90-day IV 2.1 points above 30-day. Skew at 25 delta is -3.1 points. The 30-day expected move is 14.28, or 7.05%, and the 7-day expected move is 3.41%. The 30-day expiry is Nov 27, 2026.

Activity and premium yields

Put/call volume ratio is 0.49 with net call premium of $40.8M on the day; open interest is 144.8K and the liquidity score is 83. Premium yields for the 30-day expiry: 15.22% annualized for the put at the 195.00 strike, and 18.89% for the call at the 210.00 strike.

Earnings move history

Over eight quarters the average actual earnings move was 4.56% and the median was 2.63%, with a maximum of 10.40%. The Oct 21 implied move was 3.90% versus an actual 0.92%. Average implied volatility crush was 10.64%.

Analysis written October 28, 2026 from Qanvo data as of October 27, 2026. AI-generated, for information only; not investment advice.