✦ The Future BetsNarrow moat

Philip Morris International (PM) — the future bets

PMI's next growth depends on selling ZYN outside America and IQOS inside it, the two things it has not yet done at scale.

PMI's future depends on taking what worked in one place to another. Smoke-free products were about 42% of net revenues in the second quarter of 2026, up 0.5 point1, and the company's 2026 to 2028 plan calls for organic net revenue growth of 6% to 8% a year and adjusted earnings per share growth of 9% to 11% excluding currency, with no share repurchases2.

Smoke-free share of net revenues (%)36.5202338.7202441.52025about 42Q2 2026PMI Form 10-K FY2025; Q2 2026 results release; 2023-2024 calculated
Up about 2.5 points a year.

Four bets carry that plan. ZYN is sold in 60 markets3, but almost all of its volume is American; taking it abroad is the first bet. IQOS is the mirror image: dominant abroad, confined to one American city, with the product PMI sells internationally awaiting FDA review. The third bet is the plan itself, which must be delivered without buybacks. The fourth is e-vapor, where PMI's VEEV doubled its volume in 20254.

The bets have different odds. The plan rests on businesses PMI already runs; the American IQOS launch rests on a regulator's decision; ZYN abroad rests on consumer habits PMI has not yet proved outside Scandinavia and America.

What the bets share is that none requires a large acquisition. PMI's operating cash flow of about $45 billion expected over 2026 to 20285 is largely committed to the dividend and debt reduction.

The analysts following PMI mostly expect the plan to work. Sixteen of them had a consensus buy rating in September 2026, with an average price target of $208.13 against a share price of $190.486. The target implies modest upside, which is consistent with a plan built on growth rather than on buybacks.

The future is narrow but widening. The smoke-free share of revenue is the running score, about 42% in the second quarter of 20267; a year in which it rises less than a point would mean the bets are not yet paying.

Moat trajectory: Widening

Smoke-free share of revenue about 42% in Q2 2026, up 0.5 point.

The number that tests this moat
Reported
Smoke-free share of net revenues, latest quarter
About 42% (Q2 2026), up 0.5 point

The running score of the transition; a gain under a point a year would mean the bets are not yet paying.

Source: PMI Q2 2026 results release ↗
✦ Future bets — beyond today's moat
✦ FUTURE BET 01
ZYN Beyond America: Sixty Markets, Small Volumes
ZYN is sold in 60 countries, but about nine of every ten cans go to the United States.
✦ FUTURE BET 02
IQOS ILUMA and the American Launch
IQOS ILUMA has waited for an FDA decision since March 2024, while 25 million American smokers buy no PMI cigarettes.
✦ FUTURE BET 03
The 2026 to 2028 Plan: Growth Without Buybacks
PMI promises 9% to 11% annual earnings-per-share growth to 2028 with no buybacks, so the business alone has to deliver it.
✦ FUTURE BET 04
VEEV: Doubling in E-Vapor
PMI's e-vapor volume doubled in 2025, but it is still about 2% of its heated-tobacco volume.
References
  1. ReportedSmoke-free products were about 42% of net revenues in the second quarter of 2026, up 0.5 point, and the company's 2026 to 2028 plan calls for organic net revenue growth of 6% to 8% a year and adjusted earnings per share growth of 9% to 11% excluding currency, with no share repurchases.
    Philip Morris International second-quarter 2026 results release, Form 8-K exhibit 99.1 - volumes, shares, ZYN and 2026 guidance - results, margins, operating companies income, cash and 2026 guidance. — Q2 2026 · publ. 22 July 2026 · source ↗
  2. ReportedSmoke-free products were about 42% of net revenues in the second quarter of 2026, up 0.5 point, and the company's 2026 to 2028 plan calls for organic net revenue growth of 6% to 8% a year and adjusted earnings per share growth of 9% to 11% excluding currency, with no share repurchases.
    Philip Morris International fourth-quarter and full-year 2025 results release, Form 8-K exhibit 99.1 - smoke-free share of revenue and gross profit, 2026 guidance and 2026-2028 targets. — FY2025 · publ. 6 February 2026 · source ↗
  3. ReportedZYN is sold in 60 markets, but almost all of its volume is American; taking it abroad is the first bet.
    Philip Morris International second-quarter 2026 results release, Form 8-K exhibit 99.1 - volumes, shares, ZYN and 2026 guidance - shipment volumes, market shares, IQOS, ZYN and Japan. — Q2 2026 · publ. 22 July 2026 · source ↗
  4. ReportedThe fourth is e-vapor, where PMI's VEEV doubled its volume in 2025.
    Philip Morris International Form 8-K exhibit 99.1 - 2025 and 2024 results recast into the new segments International Smoke-Free, International Combustibles and U.S. — FY2025 · publ. 13 March 2026 · source ↗
  5. ReportedPMI's operating cash flow of about $45 billion expected over 2026 to 2028 is largely committed to the dividend and debt reduction.
    Philip Morris International CAGNY 2026 presentation slides - ROIC, volumes, blocked markets and cash flow targets. — February 2026 · publ. 18 February 2026 · source ↗
  6. ReportedSixteen of them had a consensus buy rating in September 2026, with an average price target of $208.13 against a share price of $190.48.
    Philip Morris International (PM) market data - $190.48 a share at the close on 25 September 2026, market cap $296.88B, 52-week range 142.11-207.76, beta 0.40, 16 analysts with a consensus Buy rating and a price target of $208.13. — September 2026 · publ. 25 September 2026 · source ↗
  7. ReportedThe smoke-free share of revenue is the running score, about 42% in the second quarter of 2026; a year in which it rises less than a point would mean the bets are not yet paying.
    Philip Morris International second-quarter 2026 results release, Form 8-K exhibit 99.1 - volumes, shares, ZYN and 2026 guidance - shipment volumes, market shares, IQOS, ZYN and Japan. — Q2 2026 · publ. 22 July 2026 · source ↗
Sources
Generated September 26, 2026