PM heads into tomorrow's print riding a strong 2026 so far. Shares have run from roughly $160 in early January to the high-$180s/near-$190s currently, with a notable jump around the Q1 report in late April and a fresh push to new highs in mid-July. Sentiment heading into the quarter is constructive: Philip Morris International is scheduled to report second-quarter earnings on Wednesday, July 22 before the US open, and sentiment is fairly bullish on PM, especially compared to the rest of the consumer staples space, given relatively robust growth in its Smoke-Free Products (SFP) businesses, which are approaching 50% of total revenue. The Street expects total organic growth of approximately 5% for Q2, including SFP growth of approximately 10.3%, with EPS of approximately $2.07.
Separately, Zacks' consensus points to revenue of roughly $10.56 billion (+4.1% reported) and EPS near $2.04, with full-year 2026 EPS consensus around $8.40 (+11.4% y/y) and 2027 consensus near $9.23 (+9.9%). Analyst price targets have drifted slightly lower recently (~$180 vs. ~$183 previously per Simply Wall St aggregation), even as the stock has pushed to new highs — a modest disconnect worth watching for tomorrow's reaction.
PM's Q1 2026 print (reported April 22) was a strong beat and sets the tone for expectations. Management noted: We delivered a strong start to the year with outstanding growth from our international smoke-free business and very robust pricing driving impressive progress, despite a particularly strong prior-year comparison for both the U.S. and combustibles. Organic top line and operating income growth exceeded our expectations, driving plus 10% adjusted OI growth and plus 16% adjusted diluted earnings per share growth to reach $1.96.
The international smoke-free engine was the standout: International smoke-free delivered a striking performance with double-digit volume growth, mid-teens organic top line progression and high-teens organic gross profit growth, or almost plus 30% in dollar terms. This was led by IQOS, with close to plus 11% adjusted in-market sales growth, alongside further multi-category accretion from ZYN and VEEV, which reached the estimated joint number one closed pods position in Europe based on Nielsen offtake data.
Combustibles remained resilient despite tough comps: The financial performance of our combustible business was robust, delivering results in line with our midterm model, with low single-digit organic top line growth and low- to mid-single-digit organic gross profit growth.
The one soft spot was the U.S., where ZYN shipments lagged offtake due to inventory normalization: In the U.S., ZYN offtake volumes grew by plus 10% despite an uneven competitive landscape. As anticipated, segment financial performance was challenging due to the specific combination of impact this quarter, including increased investment and the comparison to Q1 2025, which had close to no price promotion and a significant ZYN inventory rebuild. Management guided that this dynamic should progressively improve through the year, especially in H2.
Management reaffirmed full-year targets and gave specific Q2 guardrails on the Q1 call:
Full year 2026 (currency-neutral): We continue to expect broadly stable shipment volumes, organic net revenue growth of plus 5% to plus 7%, organic operating income growth of plus 7% to plus 9%, and currency-neutral adjusted diluted earnings per share growth of plus 7.5% to plus 9.5%. With FX now a tailwind, we now forecast a currency tailwind of $0.25 at prevailing rates. This results in an updated adjusted diluted EPS forecast of $8.36 to $8.51, or plus 10.9% to plus 12.9% growth in dollar terms.
Q2 2026 specifically: For the second quarter, we expect continued strong performance from our international business and a sequential improvement in growth with HTU shipment volume of 40 billion to 42 billion, slower HTU adjusted IMS growth due to the short-term impact of excise-driven pricing in Japan, and a low single-digit cigarette shipment volume decline. We expect mid-single-digit organic net revenue growth and solid operating income progression, despite another quarter of strong commercial investment. On EPS: We forecast adjusted diluted EPS of $2.02 to $2.07, including a higher effective tax rate and a favorable currency variance of $0.02 at prevailing rates.
Key takeaway: Street EPS consensus (~$2.04–$2.07) sits right at the top of management's own $2.02–$2.07 range — leaving relatively little room for a "beat and raise" unless smoke-free momentum (IQOS especially) continues to run ahead of plan as it did in Q1.
a) IQOS — still the core profit engine. Q1 saw record milestones (Tokyo >40% share, Taiwan's blockbuster launch reaching ~6% national share and ~8% in Taipei within months). Management was explicit that the biggest driver for our performance globally on smoke-free, international and U.S. combined is IQOS, and margin expansion there is being driven by pricing, scale, and productivity, not just volume. Watch for continued share gains in Europe (ex-flavor-ban markets), Japan post-excise reaction, and further Taiwan/GCC/Korea/Indonesia momentum.
b) Japan HTU volatility. The April 1 excise-driven price hike triggered pantry-loading in Q1 that management flagged would reverse in Q2: We expect Q2 adjusted IMS growth to reflect the reversal of consumer pantry-loading and the price increases which took effect on April 1. A sharp headline deceleration in Japan HTU IMS this quarter should be viewed as largely mechanical, not a demand problem — but the market reaction will be a key tell.
c) U.S. ZYN — the swing factor for sentiment. Shipments should still be running below offtake as downstream inventory continues to normalize toward management's own quarterly shipment bases (~180M cans in Q2, ~205M in Q3, ~200M in Q4). Management argued 2H should look better on comparisons and, critically, is banking on innovation: we expect innovation to positively impact our second part of the year, tied to progress on the FDA's nicotine pouch pilot program for ZYN Ultra. On the FDA process itself: The authorization of ZYN Ultra via the FDA's nicotine pouch pilot program remains a priority. Our application remains under active scientific review... while it has taken longer than targeted, the science supporting our application is robust and we are optimistic that we will be able to launch this product to consumer in the coming months. Any update (positive or negative) on ZYN Ultra timing, or on new state-level nicotine pouch excise tax proposals, will move the stock. Also worth monitoring: ZYN price-gap versus competitors, which analysts have flagged as wider than PMI's stated comfort level.
d) Combustibles — pricing still doing the heavy lifting. Q1 pricing of +8.5% was a standout, and management raised the full-year pricing variance view: we now forecast a full-year variance of more than 6% for combustible pricing, even as cigarette volumes decline at the higher end of guidance (~3% for the year) due to illicit trade pressure, excise-driven declines (Mexico, India) and tough prior-year comps.
e) Currency. FX has swung from a modest headwind assumption to a real tailwind for 2026 EPS (+$0.25 full year, +$0.02 in Q2 specifically per the guide above) — helpful optics on reported EPS growth, though organic/constant-currency metrics remain the cleaner read of underlying business health.
CFO transition. This is a notable overhang/talking point for the call. Per an 8-K filed July 9: As previously disclosed in the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 20, 2026, the Board of Directors of Philip Morris International Inc. approved the appointment of Massimo Andolina, the Company's current President, Europe Region, to the position of Group Chief Financial Officer, replacing Emmanuel Babeau, effective August 1, 2026. Mr. Babeau will remain employed by the Company as Strategic Advisor to Jacek Olczak, Group CEO PMI, through March 31, 2027. This means Babeau, PM's long-tenured CFO who has run every recent earnings call (including Q1's), is very likely presenting his final quarterly results as CFO tomorrow, with Andolina — previously head of the important Europe region, home of IQOS's most mature and profitable market — stepping in from August 1. Watch for commentary on succession/continuity and any color on Andolina's priorities.
Dividend. The Board maintained (rather than raised) the quarterly dividend at the June 11 declaration, per the 8-K: On June 11, 2026, Philip Morris International Inc. issued a press release announcing that its Board of Directors declared a regular quarterly dividend of $1.47 per common share. This matched the prior quarter's rate — consistent with the pattern of PMI typically revisiting the dividend rate in September, so no signal of concern here, but a reminder that the "progressive dividend policy" story is intact and could see its next step-up around Q3 results.
Philip Morris goes into Q2 2026 with strong underlying momentum in its smoke-free multi-category portfolio (IQOS, ZYN, VEEV) and reaffirmed double-digit EPS growth guidance for the year, but consensus estimates are already parked at the high end of management's own Q2 EPS range, leaving limited room for error. The most important storylines for tomorrow's call are: (1) the pace of U.S. ZYN normalization and any ZYN Ultra/FDA timeline update, (2) whether Japan's expected HTU deceleration is purely mechanical as flagged, (3) continued combustible pricing power against volume softness, and (4) first substantive commentary framing the CFO handover from Emmanuel Babeau to Massimo Andolina.