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AUSTIN - Philip Morris International’s U.S. affiliate, PMI U.S., has announced the expansion of its IQOS heated tobacco system in Austin, Texas, to adults aged 21 and over. Following a successful pilot program, the product, which is the first of its kind authorized by the U.S. Food and Drug Administration (FDA), is now available for purchase at select mobile locations throughout the city. The company, with a substantial market capitalization of $245 billion and impressive gross profit margins of 65%, continues to demonstrate strong market leadership in the tobacco industry.
The IQOS system is designed to heat tobacco without burning it, a process that PMI claims significantly reduces exposure to harmful chemicals typically found in cigarettes and other traditional tobacco products. The company aims to provide a better alternative to conventional smoking, targeting the 45 million nicotine consumers in the U.S., including the 30 million who currently smoke traditional cigarettes. According to InvestingPro data, PMI’s strategic initiatives have yielded impressive results, with the stock delivering an 81% return over the past year and maintaining a steady 3.4% dividend yield.
During the Austin MotoGP Red Bull Grand Prix of the Americas, PMI U.S. conducted demonstrations and guided trials to introduce the IQOS system to adult smokers. The company has also employed IQOS coaches to educate potential users about the product’s features.
IQOS will be further accessible to the legal-aged smoking population in Austin through online purchases starting in late April 2025. This move is part of PMI’s broader mission to improve public health by offering smoke-free alternatives to cigarettes.
The information provided in this article is based on a press release statement from Philip Morris International.
In other recent news, Philip Morris International Inc. has made significant changes to its segment reporting structure following the sale of Vectura Group Ltd. The company has integrated remaining Wellness and Healthcare results into its Europe segment and renamed its "PMI Duty Free" business to "PMI Global Travel Retail." This reorganization has no financial impact on previously reported results, and Philip Morris has provided recast financial information to aid investors. In another development, Fitch Ratings revised its outlook for Philip Morris to stable from negative, affirming its ’A’ rating due to the company’s progress in reducing debt and improving cash flow. The company achieved a 9.8% organic revenue growth and a 14.9% increase in adjusted operating income for 2024, driven by smoke-free products.
Additionally, Philip Morris, along with Japan Tobacco and British American Tobacco, has agreed to a $22.6 billion settlement to resolve Canadian lawsuits related to tobacco health risks. This settlement aims to end years of legal uncertainty. On the analyst front, Citi and Stifel have both raised their price targets for Philip Morris shares, with Citi setting a target of $163 and Stifel setting it at $160, while maintaining their Buy ratings. Both firms cite the company’s strong financial performance and growth prospects, particularly in smoke-free products, as reasons for their optimism. These recent developments reflect Philip Morris’s strategic adjustments and growth trajectory in the evolving tobacco industry.
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