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Philip Morris (PM.US) shares hit a record high as demand for Zynpuffs nicotine pouches surges, driving Q3 results above expectations

Market IntelTuesday, Oct 22, 2024 10:20 pm ET

1min read

Zyn, Philip Morris' (PM.US) oral nicotine pouch brand, saw demand soar in the third quarter, driving the company's stock price to a record high on Tuesday, according to ZBJ Finance APP.

Philip Morris' stock jumped to a record high of US$131.97, and closed at a record high, up 8.4% from the previous day.

The record high on Tuesday followed the company's announcement that shipments of its Zyn oral nicotine pouches had grown by leaps and bounds.

This is the latest milestone for Philip Morris' stock this year, as Wall Street has learned how the product has captured consumer interest.

The stock barely moved from 2013 to 2023, with investors seeing it as a dividend stock in a stagnant industry. Now traders see Zyn as a growth brand, largely due to the success of the company's acquisition of Zyn two years ago through a deal with Swedish Match.

"The number one smoke-free brand in the U.S. continues to show very strong potential momentum," Chief Financial Officer Emmanuel Barbier told analysts on a conference call on Tuesday.

U.S. demand for Zyn drove a nearly 40% year-on-year increase in Philip Morris' oral product shipments in the first nine months of 2024.

Part of the growth was due to easing supply constraints. Zyn's nicotine pouch shipments in the U.S. grew by more than 41% year-on-year in the third quarter of this year, Barbier said.

International markets also saw growth, with total pouch shipments outside the U.S. soaring nearly 70% from the third quarter of 2023 to 2024. Zyn is now available in 30 markets, including recent expansions in Greece and the Czech Republic.

Philip Morris also noted that Zyn was a major driver of the company's net income. The company's third-quarter financial results beat analyst expectations compiled by FactSet, while it raised its full-year earnings per share forecast. It now expects full-year EPS to be between US$6.85-US$6.91, versus a consensus of US$6.40.

Zyn has become a symbol of tobacco companies' shift to traditional cigarette alternatives. Philip Morris announced earlier this year that it would invest US$600 million to build a new production facility for Zyn in Colorado.

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