Philip Morris Wants to Quit Cigarettes in the U.K. It Has a Plan. -- Barrons.com
DOW JONES & COMPANY, INC. 8:24 AM ET 7/26/2021
Symbol Last Price Change
PM 98.92up +0.52 (+0.5285%)
MO 47.495down +0.005 (+0.0105%)
QUOTES AS OF 01:57:16 PM ET 07/26/2021
Al Root
Philip Morris International (PM) said to The Daily Mail it will stop selling cigarettes in the U.K. 10 years from now. That might be a problem for a cigarette maker, but the company isn't folding up shop. It has a plan.
Philip Morris (PM) is, essentially, the international business of Altria(MO) . Philip Morris's(PM) sales come from non-U.S. markets. The European Union accounts for about 37% of total sales. Asian markets are the next biggest geographies for the company.
The U.K is only one market. That's the first thing for investors to consider. The company's CEO was answering questions about that market, specifically, and U.K. government officials want the country to be smoke-free by 2030.
But smoke-free is part of Philip Morris(PM) plans too. Today, the company reports almost 25% of sales from " reduced risk" products such as IQOS, which uses heated tobacco and is are supposed to be less harmful than traditional cigarettes.
Betting on a successful transition makes some sense. Barron's found that Altria(MO) stock -- which spun out Philip Morris(PM) in 2008 -- has been one of the best-performing stocks over the past century, returning roughly 15% a year on average for the past 100 years, including reinvested dividends.
Philip Morris (PM) stock is unchanged in premarket trading. S&P 500 and Dow Jones Industrial Average futures are down 0.3% and 0.4%, respectively.
Write to allen.root@dowjones.com
