Moat ranks
Balance sheet
| $B | Dec 31 | Sep 30 |
|---|---|---|
| Cash | 4.9 | 6.7 |
| Securities | 0.0 | 0.0 |
| Debt | 48.8 | 47.5 |
| Net cash | -43.9 | -40.8 |
| Equity | -10.0 | -7.9 |
- Debt / EBITDA
- 2.54×
- Debt / equity
- –
- Leases (12/31/25)
- $817M
- Diluted shares
- 1,560M
- Book value / share
- −$5.09
- Price / book
- –
- Net cash / share
- −$26.14
- Market cap
- $302.9B
- Enterprise value
- $343.6B
Per-share record
Key indicators
| Indicator | Latest | Vs year ago | Last 8 quarters |
|---|---|---|---|
| Revenue growth | 5.5% | -4.0 pts | |
| Operating margin | 42.5% | +3.2 pts | |
| FCF margin | 43.5% | +5.7 pts | |
| Capex / revenue | 3.3% | -0.0 pts | |
| Cigarette shipments | 158.00B | +0% | |
| Heated tobacco unit shipments | 41.50B | +2% | |
| Marlboro cigarette category share | 11.4% | – | |
| HTU adjusted in-market sales growth | +8% | – | |
| U.S. ZYN pouch shipments | 3.20B | – |
Margins and growth from reported quarters; company KPIs as reported in results releases.
About PM
Philip Morris sells branded nicotine products worldwide. In 2025, combustibles supplied 58.5% of net revenue, smoke-free products excluding wellness 40.9%, and wellness 0.6%.
- Brand Trust
Marlboro is the leading international cigarette in PMI disclosures and matched a record 11.0% category share in Q2, but plain packaging, limited marketing, and downtrading constrain the rating.
- Compliance Advantage
PMI can make product-specific claims competitors lack: June FDA orders permit a modified-risk claim for 20 ZYN products and April orders renewed IQOS reduced-exposure claims.
- Installed Base Consumables
IQOS heaters use dedicated sticks such as TEREA, creating repeated consumable purchases after device adoption.
- IP Choke Point
Patented heater designs and proprietary sticks slow direct copies, but rivals can use other heating methods.
- Sep 28, 2026
FDA announced plans to review the PMTA framework, creating uncertainty about how durable product-approval barriers will remain.
- Sep 18, 2026
PMI raised its quarterly dividend from USD1.47 to USD1.60, increasing the recurring cash distribution commitment.
- Sep 8, 2026
PMI raised full-year EPS guidance for currency only, to USD8.35–8.50 adjusted, while the 7.5–9.5% currency-neutral growth forecast stayed unchanged.
- Aug 24, 2026
PMI agreed with Altria on contract cigarette manufacturing, with first shipments expected in early 2027 and no material 2026 financial effect; the agreement does not introduce PMI cigarettes in the U.S.
- Aug 21, 2026
FDA authorized 11 ZYN ULTRA products for marketing, adding 9mg and one 11mg variant to the lawful U.S. pouch portfolio.
Ownership
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On this page
Financial record
| Fiscal year | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | TTM | Trend | Change 2016–25 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Per share ($) | |||||||||||||
| Revenue | 17.21 | 18.51 | 19.05 | 19.15 | 18.42 | 20.14 | 20.47 | 22.65 | 24.34 | 26.09 | 27.65 | +4.7%/yr | |
| Cash flow | 5.21 | 5.74 | 6.10 | 6.48 | 6.30 | 7.68 | 6.96 | 5.93 | 7.85 | 7.85 | 9.71 | +4.7%/yr | |
| Earnings | 4.49 | 3.89 | 5.09 | 4.62 | 5.17 | 5.84 | 5.83 | 5.03 | 4.54 | 7.28 | 6.86 | +5.5%/yr | |
| Free cash flow | 4.45 | 4.74 | 5.17 | 5.94 | 5.91 | 7.20 | 5.62 | 3.93 | 6.92 | 6.84 | 8.71 | +4.9%/yr | |
| Capex | 0.76 | 1.00 | 0.92 | 0.55 | 0.39 | 0.48 | 1.34 | 1.99 | 0.93 | 1.01 | 1.00 | +3.2%/yr | |
| Dividends | 4.11 | 4.20 | 4.43 | 4.60 | 4.73 | 4.86 | 5.03 | 5.13 | 5.27 | 5.54 | 5.90 | +3.4%/yr | |
| Book value | -8.18 | -7.78 | -8.01 | -7.44 | -8.07 | -6.48 | -5.77 | -7.23 | -7.55 | -6.41 | -5.09 | – | |
| Diluted shares (M) | 1,551 | 1,553 | 1,555 | 1,556 | 1,558 | 1,559 | 1,552 | 1,553 | 1,556 | 1,558 | 1,560 | +0.1%/yr | |
| Totals ($B) | |||||||||||||
| Revenue | 26.7 | 28.7 | 29.6 | 29.8 | 28.7 | 31.4 | 31.8 | 35.2 | 37.9 | 40.6 | 43.1 | +4.8%/yr | |
| Operating income | 10.9 | 11.6 | 11.4 | 10.5 | 11.7 | 13.0 | 12.2 | 11.6 | 13.4 | 14.9 | 16.7 | +3.5%/yr | |
| Net income | 7.0 | 6.0 | 7.9 | 7.2 | 8.1 | 9.1 | 9.0 | 7.8 | 7.1 | 11.3 | 10.7 | +5.6%/yr | |
| Free cash flow | 6.9 | 7.4 | 8.0 | 9.2 | 9.2 | 11.2 | 8.7 | 6.1 | 10.8 | 10.7 | 13.6 | +4.9%/yr | |
| Buybacks | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.8 | 0.2 | 0.0 | 0.0 | 0.0 | 0.0 | – | |
| Dividends | 6.4 | 6.5 | 6.9 | 7.2 | 7.4 | 7.6 | 7.8 | 8.0 | 8.2 | 8.6 | 9.2 | +3.4%/yr | |
| Net cash | -24.8 | -25.9 | -25.1 | -24.1 | -24.2 | -23.2 | -39.9 | -44.8 | -41.4 | -43.9 | -40.8 | −$19.1B | |
| Margins & returns (%) | |||||||||||||
| Gross margin | 64.8 | 63.7 | 63.7 | 64.7 | 66.7 | 68.1 | 64.1 | 63.3 | 64.8 | 67.1 | 67.7 | +2.3 pts | |
| Operating margin | 40.9 | 40.3 | 38.4 | 35.3 | 40.7 | 41.3 | 38.6 | 32.9 | 35.4 | 36.6 | 38.6 | -4.2 pts | |
| Net margin | 26.1 | 21.0 | 26.7 | 24.1 | 28.1 | 29.0 | 28.5 | 22.2 | 18.6 | 27.9 | 24.8 | +1.8 pts | |
| FCF margin | 25.9 | 25.6 | 27.1 | 31.0 | 32.1 | 35.7 | 27.5 | 17.4 | 28.4 | 26.2 | 31.5 | +0.4 pts | |
| ROIC | 70.8 | 66.2 | 70.6 | 66.0 | 78.8 | 77.8 | 31.2 | 27.1 | 35.6 | 34.6 | 39.9 | -36.2 pts | |
| R&D % of revenue | 1.6 | 1.6 | 1.3 | 1.6 | 1.7 | 2.0 | 2.0 | 2.0 | 2.0 | 1.9 | – | +0.3 pts | |
| Capex % of revenue | 4.4 | 5.4 | 4.8 | 2.9 | 2.1 | 2.4 | 6.5 | 8.8 | 3.8 | 3.9 | 3.6 | -0.5 pts | |
Change uses 2016 and 2025 only: compound annual growth for amounts, points for margins and returns, and the change in amount for net cash. A dash means no 2016 base. Trend shows the fiscal years.
Moat
Moat scorecard
- Strength
- Confidence
- Structure
- Oligopoly
- Durability
- durable
- Trajectory
- stable
- Pricing power
- strong
- Combustible Tobacco58.5%1 claim
- Smoke-Free Products40.9%3 claims
- Wellness0.6%No moat
Moat claims
- Applies to
- Combustible Tobacco
- Confidence
- Durability
- durable
- Trajectory
- stableas of Oct 7, 2026
Marlboro is the leading international cigarette in PMI disclosures and matched a record 11.0% category share in Q2, but plain packaging, limited marketing, and downtrading constrain the rating.
Marlboro reached 11.0% cigarette category share in Q2 2026, up 0.3 percentage points, while PMI’s category share stayed at 25.3%; brand demand holds despite lower H1 cigarette shipments.
- Cigarette shipments158.00B+0%
- Marlboro cigarette category share11.4%
- Accelerated smoking prevalence decline
- Downtrading to value brands or illicit products
- Plain packaging and marketing restrictions reducing differentiation
- Reputational/litigation shocks
- Applies to
- Smoke-Free Products
- Confidence
- Durability
- medium
- Trajectory
- stableas of Oct 7, 2026
PMI can make product-specific claims competitors lack: June FDA orders permit a modified-risk claim for 20 ZYN products and April orders renewed IQOS reduced-exposure claims. August marketing orders for 11 ZYN ULTRA products add legal access, but do not extend the modified-risk claim to ULTRA. FDA’s September plan to review the approval framework and enforcement discretion mean approvals are a contested advantage.
Orders for 20 ZYN modified-risk products and 11 ZYN ULTRA marketing products widen lawful access, but September’s proposed FDA framework review and rival approvals prevent a clear increase in exclusivity.
- U.S. ZYN pouch shipments3.20B
- ZYN modified-risk authorized products20
- Stricter standards, flavor bans, or category restrictions
- Tax equalization with cigarettes reducing switching incentives
- Enforcement actions or authorization withdrawals
- FDA enforcement discretion can allow unauthorized rivals to compete for the same adult consumers.
- Youth uptake can trigger withdrawal of product-specific orders; ZYN modified-risk orders expire after five years.
- SourceFDA authorizes modified-risk claim for 20 ZYN nicotine pouchesJun 30, 2026
- SourceFDA renews modified-risk granted orders for five IQOS productsApr 17, 2026
- SourceFDA authorizes 11 ZYN ULTRA products through PMTA; no modified-risk claim conferredAug 21, 2026
- SourceFDA intends to evaluate PMTA framework changes while continuing current reviewsSep 28, 2026
- Applies to
- Smoke-Free Products
- Confidence
- Durability
- durable
- Trajectory
- wideningas of Oct 7, 2026
IQOS heaters use dedicated sticks such as TEREA, creating repeated consumable purchases after device adoption. Q3 HTU adjusted in-market sales grew8.0%, while shipments grew1.5% amid shipment phasing; final-use and shipment timing remain distinct. Source: https://www.pmi.com/investor-relations/press-releases-and-events/press-releases-overview/press-release-details?newsId=30486 The mechanism does not apply to ZYN pouches, where consumers can switch brands without buying a new device.
Q2 2026 HTU adjusted in-market sales grew 5.1% and IQOS gained 0.2 percentage points to 9.2% of cigarette-plus-HTU volumes where present, expanding recurring stick demand despite Japan tax and Poland flavor pressure.
- Heated tobacco unit shipments41.50B+2%
- HTU adjusted in-market sales growth+8%
- Multi-homing across nicotine formats (users split spend)
- Device commoditization and competing systems
- Illicit/unauthorized consumables and gray-market diversion
- Applies to
- Smoke-Free Products
- Confidence
- Durability
- medium
- Trajectory
- stableas of Oct 7, 2026
Patented heater designs and proprietary sticks slow direct copies, but rivals can use other heating methods. PMI’s approximate three-quarters heat-not-burn category share is evidence of platform position, not proof that patents caused it. The modest rating also reflects rivals’ IP claims and pending U.S. ILUMA authorization.
PMI still describes about three-quarters heat-not-burn volume share, but Q2 2026 disclosures provide no new evidence of stronger patent exclusion; commercial leadership and IP protection remain different tests.
- Heated tobacco unit shipments41.50B+2%
- HTU adjusted in-market sales growth+8%
- Patent expirations and design-arounds
- Adverse IP litigation outcomes
- Regulatory rules that weaken platform control
Profile change log
- Oct 7, 2026 · analyst revision
Replaced H1 2026 revenue weights with FY2025 product-category weights: combustibles 58.5%, smoke-free excluding wellness 40.9%, wellness 0.6%; retained the three product groupings and all four moat ratings. Added claim trajectories, dated debate, management and linked market context. IQOS switching friction is separated from ZYN’s device-free economics.
- Oct 7, 2026 · business change
FDA announced plans to review the PMTA framework, creating uncertainty about how durable product-approval barriers will remain.
- Oct 7, 2026 · business change
PMI raised its quarterly dividend from USD1.47 to USD1.60, increasing the recurring cash distribution commitment.
- Oct 7, 2026 · business change
PMI raised full-year EPS guidance for currency only, to USD8.35–8.50 adjusted, while the 7.5–9.5% currency-neutral growth forecast stayed unchanged.
- Oct 7, 2026 · business change
PMI agreed with Altria on contract cigarette manufacturing, with first shipments expected in early 2027 and no material 2026 financial effect; the agreement does not introduce PMI cigarettes in the U.S.
- Oct 7, 2026 · business change
FDA authorized 11 ZYN ULTRA products for marketing, adding 9mg and one 11mg variant to the lawful U.S. pouch portfolio.
- Oct 7, 2026 · business change
Massimo Andolina became Group CFO; Emmanuel Babeau continued as an adviser through March 2027, preserving transition support during debt and investment decisions.
- Oct 7, 2026 · business change
PMI opened its Aurora ZYN manufacturing campus; commercial production began in July, adding U.S. production and export capacity.
- Oct 7, 2026 · business change
FDA granted modified-risk orders for 20 ZYN products, allowing specified risk-reduction communication subject to surveillance and renewal.
- Oct 7, 2026 · business change
Updated RBH five-year projections reduced PMI’s investment value; PMI recognized a USD511m non-cash impairment in Q2, showing continuing pressure on Canadian earnings.
- Oct 7, 2026 · business change
FDA renewed modified-risk orders for five IQOS products, preserving authorized reduced-exposure claims for those specific products.
- Oct 7, 2026 · business change
PMI adopted International Smoke-Free, International Combustibles and U.S. reporting segments, making product economics and U.S. investment easier to distinguish.
- Oct 7, 2026 · business change
The Canadian tobacco claims plan took effect; RBH stayed deconsolidated and part of its future cash generation was committed to settling claims.
- Oct 7, 2026 · business change
PMI completed the sale of Vectura, reducing inhaled-health exposure and recognizing a USD199m pretax loss.
- Oct 7, 2026 · business change
PMI completed its initial Swedish Match purchase, adding ZYN and oral nicotine capabilities; the acquisition increased debt and future acquired-intangible amortization.
- Oct 7, 2026 · business change
PM Germany withdrew its challenge to TEREA’s cigarette excise-tax classification, recognizing a USD176m pretax charge; the decision illustrates how product taxation can reduce heated-tobacco returns.
Industry & peers
Peer map
Major legal combustible tobacco markets
Legal cigarettes and other combustible tobacco products in the international markets outside China covered by BAT’s industry outlook. The size figure is manufacturer/category revenue in that model, not tax-inclusive retail spending or a complete global census; smokeless nicotine products are excluded.
- Philip Morris International
- British American Tobacco
- Japan Tobacco
- Imperial Brands
- Altria
| Stocks | Moat | Gross m. | Op. m. | |
|---|---|---|---|---|
| PM | 88 | 67.7% | 38.6% | |
| Industry median | 3 | 88 | – | – |
| Sector median | 85 | 74 | 55.3% | 17.0% |
| All stocks median | 398 | 76 | 53.1% | 20.0% |
Moat medians cover every stock. Margin medians count only stocks with collected numbers and need at least three.
Drivers & risks
- Established brands and limited advertising access make it harder for new manufacturers to win recurring adult smokers.
- Price increases and a shift between premium and value packs can support nominal manufacturer revenue despite declining cigarette volume.
- Smokers moving to pouches, heated tobacco and vapour change the nicotine profit pool; manufacturers with successful alternatives can retain part of that spending.
- Currency translation can materially change reported profit without changing local demand. PMI raised September 2026 EPS guidance by USD0.09 for currency only, while BAT expected a 2–2.5% currency headwind; exposure depends on each issuer’s reporting currency and sales mix.
- Habitual consumption makes volumes less sensitive to ordinary recessions than durable goods, but tighter household budgets change the brand and legal/illicit mix.
- High excise taxes, plain packaging, menthol/flavour restrictions and birth-cohort sales bans can weaken branded legal sales. The UK cohort restriction starts January 1, 2027.
- Discount brands and illicit cigarettes can take demand when legal prices rise faster than income. BAT estimated about 80% illicit volume in Australia in H1 2026; that is a company estimate for one country, not a global share.
- Healthcare and product-liability claims can take large cash sums. BAT’s Canadian settlement resolved historical litigation but commits a portion of future Canadian earnings.
- Poor leaf harvests and higher packaging, energy and freight costs can compress returns if manufacturers cannot pass them on without losing consumers.
- Refinancing is a slower risk than daily interest changes for fixed/hedged debt. BAT’s 2025 modeled pretax loss from a 100-basis-point rate increase was GBP27m; maturities and currency mismatches still matter.
Bulls & bears
Can IQOS and ZYN generate sustained final-use and profit growth as taxes, rival products and U.S. promotional spending rise, while cigarette pricing funds the dividend and debt reduction?
Arguments
What to watch
- 1HTU adjusted in-market sales versus shipment growth
- 2U.S. ZYN final-use volumes, net pricing and gross profit
- 3Cash from operations less capex, dividends and scheduled debt repayments
Next check: Q4 and FY2026 results: test ZYN portfolio spending,20-pouch transition, Japan taxes and HTU final-use growth; monitor FDA framework review and the December7 scheduled Florida ZYN trial.
Sources: company filings and dated sources collected for Find My Moat; market cap as of Nov 10, 2026. Not investment advice.
Free to reuse, commercially too, with a credit link. See the data license.
Moat Score 88/100 by <a href="https://www.findmymoat.com/stocks/XNYS:PM">Find My Moat</a> (as of September 2026)Curation & Accuracy
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