The investment bank UBS has raised its target price for Philip Morris International from $168 to $182. This follows several key decisions by the US Food and Drug Administration (FDA).
It was at the end of June that the US FDA gave Philip Morris International and Swedish Match the go-ahead to market nicotine pouches under the Zyn brand as a less harmful alternative to cigarettes, as Vejpkollen has previously reported.
PMI/Swedish Match now markets 20 Zyn variants with claims that they pose a lower risk than cigarettes, including in relation to mouth cancer, lung cancer, emphysema and stroke.
This is the first time that a company producing white snus has been granted this opportunity. Previously, IQOS, which uses heated tobacco, and the Swedish snus brand General have been granted similar authorisations. Both products are manufactured by PMI and its subsidiary Swedish Match, respectively.
Target price raised
Shortly after the authority’s Following this decision, UBS, one of the world’s largest financial institutions, also announced that it was raising its target price for Philip Morris International shares from $168 to $182.
UBS also expects that the FDA’s decision, together with the launch of new ZYN products on the US market, will boost the company’s profits through increased sales.
Analysts at UBS expect the company’s sales of ZYN to increase by 21% in 2027. This compares with the 4 per cent decline they anticipate in 2026.
The company’s new ZYN Ultra products are aimed at the market for white snus with a higher nicotine strength. According to UBS, this segment currently accounts for just 20 per cent of the category, but the investment bank expects it to grow by as much as 60 per cent.
Goes against the industry norm
However, the UBS analysis does not contain only positive forecasts.
The financial institution expects the company’s growth in the smoke-free segment to amount to just 8% in 2027 and 2028. This is based on the expectation that IQOS growth will slow down in Japan going forward.
Their forecast also runs counter to the consensus in the financial sector, where expectations are instead for 10% for the PMI’s smoke-free segment.
