Philip Morris: Firing On All Cylinders

Philip Morris delivered strong Q2 results last week with double-digit net revenue and gross profit growth driven by IQOS and VEEV products. IQOS heated tobacco and VEEV vape brands are fueling significant top-line expansion and margin uplift, mainly because of strong shipment growth. PM trades at a forward P/E of 21.2x, much higher than MO or BTI, reflecting its focus on emerging markets and superior EPS growth prospects. Key risks include a potential slowdown in EPS growth or weaker adoption of VEEV amid intensifying competition in the vape market.