The Philip Morris International (NYSE: PM) stock price is hovering near an all-time high as investors wait for the company’s earnings. The market is also pricing in strong demand for tobacco products and the impact of the recent Vectura acquisition. The stock is trading at $98, giving the company a market capitalization of more than $154 billion.

Philip Morris earnings ahead

Philip Morris is the biggest tobacco company in the world. It is significantly bigger than other tobacco giants like Altria and British American Tobacco (BAT). The company is well-known for brands like Marlboro, Bond Street, and Red and Wine, among others. 

The company will publish its quarterly earnings on Tuesday. These results will shed more light on the company’s recovery and the recent acquisition of Vectura. 

In general, analysts expect that the company’s business did relatively well in the third quarter. Besides, many duty-free shops have reopened, and more people are visiting retail outlets.

Precisely, analysts expect the data to show that Philip Morris’s revenue increased to more than $7.93 billion in the third quarter. This will be a better performance than in the second quarter when its revenue rose to more than $7.53 billion. 

The revenue will be significantly better than the $7.4 billion that it made in the same quarter in 2020. Still, judging by the companies that have already released their earnings, there is a possibility that Philip Morris will have better results than expected. Indeed, the company reaffirmed that its momentum was doing well during a recent presentation. 

What to watch

There are several key pieces of information that investors will be watching in Philip Morris’ quarterly release. First, they will watch the trend of its IQOS product. The company has invested billions of dollars in the product in the past few years. As such, the market will be watching the growth of this segment. 

In the second quarter, IQOS represented about 13% of the company’s total volume and 30% of revenue. Already, the company has managed to convert a large share of adult smokers to start using the IQOS products. 

Second, the Philip Morris stock price will react to the company’s announcement on Vectura. Vectura is an asthma treatment company it bought recently for 1.1 billion pounds. The acquisition was part of the company’s strategy to reduce its overreliance on tobacco products.

Most importantly, the PM stock will react to the management’s strategies to boost the share price. The company targets to repurchase between $5 billion and $7 billion in stock in the next three years. 

Is PM a good investment?

There are several reasons why the PM stock is a good investment. First, the company has a major share in the tobacco and non-combustible business. With billions of smokers around, the firm will continue doing well. Second, more airports are reopening, which will boost its earnings. This is because many tobacco companies sell a substantial amount of products in duty-free shops. Third, the firm offers steady and reliable dividends. At the same time, most analysts such as those from Deutsche Bank, Barclays, and Morgan Stanley are bullish on the stock.

Philip Morris stock price analysis

The daily chart shows that the Philip Morris stock price has been in a bullish trend in the past few months. The stock has managed to jump by more than 50% since November last year. As a result, the share price is above the ascending trendline shown in blue. 

It is also attempting to move above the 25-day and 50-day moving averages while the MACD is above the neutral level. Therefore, the share price will likely retest its all-time high after its earnings.

Philip Morris stock analysis