Philip Morris Shares Fall 1.01% with $920M Market 103rd Volume as Smoke-Free Gains Clash with Combustible Declines

Philip Morris International (PM) saw its shares decline 1.01% on August 12, 2025, with a trading volume of $0.92 billion, ranking 103rd in market activity. The stock’s underperformance came amid mixed signals from its smoke-free product strategy and competitive dynamics in key markets.

The company’s ILUMA heated tobacco platform continues to drive growth in its smoke-free segment. Second-quarter 2025 adjusted in-market sales for heated tobacco units (HTUs) accelerated to 11.4%, with Europe and Japan contributing 9.1% and 7.8% growth, respectively. ILUMA’s expansion has boosted IQOS HTU market share in Europe to 10.9%, while Japan remains a core market with over 10 million users. Management highlighted the role of consumables like DELIA and LEVIA in accelerating adoption, alongside strategic rollouts in more than 30 countries.

Despite these gains, challenges persist. The combustible segment continues to face structural declines, and ILUMA’s long-term success hinges on factors such as repeat usage rates and regulatory developments. Competitors like Altria Group are also preparing U.S. launches of IQOS ILUMA, leveraging brand equity to attract adult smokers. Meanwhile, Turning Point Brands reported a surge in Modern Oral sales, underscoring intensified competition in the smoke-free category.

Valuation metrics show Philip Morris trading at a forward P/E of 21.17, above the industry average of 15.36. Analysts have slightly raised 2025 and 2026 earnings estimates to $7.49 and $8.39 per share, respectively, though the stock remains at a Zacks Rank #3 (Hold).

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day yielded a total profit of $2,340 between 2022 and the present. However, the approach faced a maximum drawdown of -15.3% on October 27, 2022, highlighting its inherent volatility and risks.