Yahoo Finance Philip Morris' Ambitious Plans for Heated Tobacco Gains Traction Among Analysts and Investors
Philip Morris International Inc’s (NYSE:PM) ambitions for heated tobacco in the United States garner attention from analysts and investors, who believe the company’s goals are within reach despite skepticism from rivals entrenched in the vaping market.
As Philip Morris gears up to introduce its flagship heated tobacco device, IQOS, in the U.S. in the second quarter, it aims to carve out a significant market share in a country dominated by vaping products.
Also Read: Tobacco Use Falls To 1 In 5 Adults Globally: Why WHO Says ‘There Is No Time For Complacency’
IQOS, already a top seller globally in the heated tobacco category, holds a pivotal role in Philip Morris’ strategy to transition from traditional cigarette manufacturing to promoting healthier alternatives.
The company is betting big on the potential of IQOS to resonate with American smokers, Reuters noted, even in a market where heated tobacco is currently negligible compared to other nicotine alternatives.
Philip Morris’ ambition is clear: it aims to capture 10% of the total U.S. cigarette and heated tobacco market within approximately five years of launching its latest device iteration, expected no earlier than 2025.
This ambitious target translates to converting around 2.8 million U.S. smokers to IQOS, a goal based on careful analysis and market forecasts.
While rivals like British American Tobacco Industries Plc (NYSE:BTI) express doubts about the prospects of heated tobacco in the U.S., analysts and investors are cautiously optimistic about Philip Morris’ chances.
Citing a Goldman Sachs analyst, Reuters emphasized the importance of closely observing PMI’s U.S. rollout, indicating a keen interest from industry watchers.
Philip Morris’ spokesperson Corey Henry remains confident in the company’s ability to replicate IQOS’s success in other markets despite initial skepticism from competitors.
Reuters notes that Barclays forecasts offer insights into the scale of PMI’s ambition, projecting substantial annual sales figures for cigarettes and heated tobacco in the U.S. by 2030.
Despite the challenges posed by a competitive landscape and regulatory constraints, Philip Morris’ strategic moves reflect a calculated approach to penetrate the lucrative American market.
Price Action: PM shares are up 0.33% at $95.33 at the last check Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo via Wikimedia Commons
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