Philip Morris International Inc. (PM) Stock Analysis
Philip Morris International Inc. (PM) Stock Analysis
Analysis from 10-Q filed 2025-10-24. Data as of Q4 2025.
Overall Grade: F (Concerning)
Philip Morris International Inc. faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 36.5% | Above industry average |
| FCF Margin | 26.2% | Strong cash generation |
| Debt/Equity | -4.5x | Conservative leverage |
Investment Thesis: Strong return on invested capital of 36.5% suggests durable competitive advantages and efficient capital allocation.
Explore Philip Morris International Inc.: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: Philip Morris International Inc. earns 36.5% ROIC, Top 5% in Consumer Staples
Philip Morris International Inc.'s trailing-twelve-month ROIC of 36.5% ranks Top 5% in Consumer Staples companies (sector median: 7.3%), driven by NOPAT margin of 29.4% combined with asset turnover of 0.6x. Source: 10-Q filed 2025-10-24. Gross margin of 67.1% with operating margin at 36.6% reflects strong pricing power.
| Metric | PM | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 36.5% | Excellent | Above sector median of 7.3% |
| Return on Equity (ROE) | -101.4% | Red flag | Moderate equity returns |
| Gross Margin | 67.1% | Excellent | Strong pricing power |
| Operating Margin | 36.6% | Excellent | Efficient operations |
Cash Flow: Philip Morris International Inc. generates $10.7B FCF at 26.2% margin, positive NaN/8 quarters
Philip Morris International Inc. generated $10.7B in free cash flow (TTM), a 26.2% FCF margin, a margin that ranks Top 5% in Consumer Staples. Operating cash flow exceeds net income by 1.1x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-Q filed 2025-10-24.
| Metric | PM | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 26.2% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $10.7B | Good | Positive cash generation |
| OCF/Net Income | 1.1x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: Philip Morris International Inc. at -4.5x leverage
Philip Morris International Inc.'s debt-to-equity ratio of -4.5x reflects conservative leverage. Total debt of $45.3B offset by $4.9B in cash. Source: 10-Q filed 2025-10-24.
| Metric | PM | Rating | Context |
|---|---|---|---|
| Debt to Equity | -4.5x | Excellent | Conservative capital structure |
| Net Cash Position | $-40.4B | Warning | Net debt position |
Valuation: Philip Morris International Inc. trades at 22.1x earnings
Philip Morris International Inc. trades at a P/E of 22.1x. Free cash flow yield of 4.3% reflects market expectations for growth.
| Metric | PM | Rating | Context |
|---|---|---|---|
| P/E Ratio | 22.1x | Adequate | Premium valuation |
| EV/Sales | 7.1x | Adequate | Growth premium priced in |
| FCF Yield | 4.3% | Good | Lower cash yield |
| Dividend Yield | 3.5% | Adequate | Meaningful income |
Capital Allocation: Philip Morris International Inc. returns 3.5% shareholder yield
Philip Morris International Inc.'s total shareholder yield is 3.5% (dividends 3.5% + buybacks). Source: 10-Q filed 2025-10-24.
| Metric | PM | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 3.5% | Good | Dividend + buyback yield combined |
| Total Capital Returned (TTM) | $8.6B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 36.5% | Top 5% | 5.0x above |
| Free Cash Flow Margin | 26.2% | Top 5% | 4.6x above |
| Gross Margin | 67.1% | Top 5% | 2.2x above |
| Operating Margin | 36.6% | Top 5% | 5.7x above |
| Return on Equity (ROE) | -101.4% | Top 5% | -12.1x below |
| P/E Ratio | 22.1x | N/A | - |
Financial Scorecard
| Metric | PM | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 36.5% | Excellent | Top 5% of sector (median: 7.3%) |
| Free Cash Flow Margin | 26.2% | Excellent | Top 5% of sector (median: 5.7%) |
| Gross Margin | 67.1% | Excellent | Top 5% of sector (median: 30.2%) |
| Debt to Equity Ratio | -453.3% | Excellent | Conservative capital structure |
| P/E Ratio (Price-to-Earnings) | 22.1x | Adequate | Fair value |
| Free Cash Flow Yield | 4.3% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is Philip Morris International Inc.'s Return on Invested Capital (ROIC)?
Philip Morris International Inc. (PM) has a trailing twelve-month Return on Invested Capital (ROIC) of 36.5%. This compares above the sector median of 7.3%. An ROIC above 20% indicates exceptional capital efficiency and strong competitive advantages.
Q: What is Philip Morris International Inc.'s Free Cash Flow Margin?
Philip Morris International Inc. (PM) has a free cash flow margin of 26.2%, generating $10.7 billion in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is Philip Morris International Inc. stock overvalued or undervalued?
Philip Morris International Inc. (PM) trades at a P/E ratio of 22.1x, which is above the sector median of N/A. The EV/Sales multiple is 7.1x. Free cash flow yield is 4.3%, which is in line with market averages.
Q: Does Philip Morris International Inc. pay a dividend?
Philip Morris International Inc. (PM) currently pays a dividend yield of 3.5%. Including share buybacks, the total shareholder yield is 3.5%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is Philip Morris International Inc.'s revenue and earnings growth?
Philip Morris International Inc. (PM) grew revenue by 7.3% year-over-year. Earnings per share increased by 60.8% compared to the prior year. Modest growth indicates a mature business with stable demand.
Q: How does Philip Morris International Inc. compare to competitors in Consumer Staples?
Compared to other companies in Consumer Staples, Philip Morris International Inc. (PM) shows: ROIC of 36.5% is above the sector median of 7.3% (Top 0%). FCF margin of 26.2% exceeds the sector median of 5.7% (Top 0% of sector). Gross margin at 67.1% is 36.9 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Consumer Staples companies with available SEC filings.
Q: What warning signs should I watch for with Philip Morris International Inc.?
Philip Morris International Inc. (PM) shows no major financial warning signs based on current metrics. However, investors should always monitor: 1) Margin compression trends, 2) Cash flow consistency, 3) Debt levels relative to cash generation, and 4) Changes in competitive positioning.
Data Source: Data sourced from 10-Q filed 2025-10-24. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.