PMI’s Strong Position in Reduced-Risk Categories Should Help It Maintain Its International Dominance

Philip Morris International is the world’s largest tobacco company by volume, with cigarette sales to over 175 countries. Despite such dominance, its goal is to completely replace its cigarette sales with reduced-risk alternatives. As of 2023, nearly 40% of revenue came from smoke-free products, though its goal of two-thirds of revenue by 2030 looks lofty and we forecast it’ll be nearing 50% by 2028. Still, we view this strategy positively, as it contributes to companywide growth by helping offset secular volume declines in traditional smokeable products.