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Yahoo
a day ago
- Business
- Yahoo
5 Consumer Staples Stocks to Buy as Fed Keeps Interest Rates Unchanged
Geopolitical tensions, a delay in the interest rate cut and uncertainty over the impact of President Donald Trump's tariffs have again made markets volatile. Although consumer confidence rebounded slightly in May after Trump temporarily paused the tariffs, investors remain concerned about the economy's health. Given the uncertainty, it would be ideal to invest in safe-haven defensive stocks from the consumer staples sector such as Philip Morris International Inc. PM, Nomad Foods Limited( NOMD), Altria Group, Inc. MO, The Coca-Cola Company KO and Ingredion Incorporated INGR. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Also, these stocks are from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a high dividend yield and a favorable Zacks Rank. The Federal Reserve left interest rates unchanged at the end of its June FOMC meeting in the current range of 4.25% to 4.5%. The move was highly expected as Federal Reserve Chairman Jerome Powell reiterated his earlier comments that the central bank will wait and watch the impact of Trump's tariffs on inflation before deciding on resuming rate cuts. Policymakers also lowered their 2025 economic growth forecast to just 1.4% and increased their core inflation outlook to 3.1%. Understandably, the uncertainty over the impact of tariffs has raised concerns among market participants about the economy's future. Although the United States has reached a trade deal with its biggest trading partner, China, it is yet to be seen how the new tariffs will impact the economy. Meanwhile, ongoing geopolitical tensions between Iran and Israel have also raised fears of a full-fledged war. Israel launched missile strikes on Iran last week, targeting its nuclear sites and reportedly eliminating several top scientists. Iran retaliated with a barrage of missile strikes on Israel over the weekend. Although the United States is yet to get directly involved in the conflict, tensions have been escalating, with Trump weighing in on striking Iran. The United States has also been mobilizing its warships and bombers in the Middle East. Washington's involvement in the conflict could further escalate tension. This could keep markets volatile for a longer period. Philip Morris International Inc. is progressing well with its business transformation in the face of consumers' rising health consciousness and stern regulations to dissuade smoking. To this end, PM has been expanding its reduced risk products (RRPs) or smoke-free products category, as evident from the success of IQOS (a heating tobacco device) that counts among one of the leading RRPs in the industry. Philip Morris International has an expected earnings growth rate of 13.7% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 3.3% over the past 60 days. PM currently carries a Zacks Rank #2. Philip Morris International has a beta of 0.52 and a current dividend yield of 2.96%. Nomad Foods Limited manufactures and distributes frozen foods primarily in the United Kingdom, Italy, Germany, Sweden, France and Norway. NOMD's portfolio of frozen food brands includes Birds Eye, Iglo and Findus. Nomad Foods Ltd. is headquartered in Feltham, the United Kingdom. Nomad Foods has an expected earnings growth rate of 7.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4% over the last 60 days. NOMD presently sports a Zacks Rank #1. Nomad Foods has a beta of 0.75 and a current dividend yield of 3.96%. Altria Group, been evolving with the changing industry dynamics. Given the rising health consciousness and stern government regulations to discourage smoking, MO has been moving beyond traditional cigarettes and expanding in the smokeless category. Altria Group's expected earnings growth rate for the current year is 5.3%. The Zacks Consensus Estimate for its current-year earnings has improved 2.1% over the past 60 days. MO currently has a Zacks Rank #2. Altria Grouphas a beta of 0.60 and a current dividend yield of 6.86%. The Coca-Cola Company's strong brand equity, marketing, research and innovation help it to garner a market share of more than 40% in the non-alcoholic beverage industry. KO is putting its best foot forward to evolve its business model to become a total beverage company with something for everyone to drink. The Coca-Cola Company has coped with the industry-wide flattening of soda sales over the years by going on a buying spree and making investments in healthier alternatives like coffee, sparkling water and sports drinks. The Coca-Cola Company has an expected earnings growth rate of 3.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. KO currently carries a Zacks Rank #2. The Coca-Cola Company has a beta of 0.46 and a current dividend yield of 2.95%. Ingredion Incorporated is an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients. INGR serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries. Ingredion's expected earnings growth rate for the current year is 6.1%. The Zacks Consensus Estimate for current-year earnings has improved 1.5% over the past 60 days. INGR carries a Zacks Rank #2. Ingredionhas a beta of 0.46 and a current dividend yield of 2.34%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO) : Free Stock Analysis Report Altria Group, Inc. (MO) : Free Stock Analysis Report Philip Morris International Inc. (PM) : Free Stock Analysis Report Ingredion Incorporated (INGR) : Free Stock Analysis Report Nomad Foods Limited (NOMD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Insider
a day ago
- Business
- Business Insider
Philip Morris (PM) Defies the Naysayers as Smoking Stays Hot in 2025
Imagine a tobacco stock surging 53% in six months—yet that's exactly what Philip Morris International (PM) has achieved, defying the usual stigma attached to sin stocks and a declining global smoker base. Unlike many of its peers, PM's story stands apart: its traditional cigarette business remains stable, heated tobacco products are experiencing rapid growth, and oral nicotine offerings are gaining momentum. Confident Investing Starts Here: Add a weak dollar boosting its predominantly international revenue, and it's clear PM's growth engine is running strong, justifying the rally and potentially signaling more upside ahead. PM's Combustible Division Remains Steady Cigarettes may seem like a dying product, but Philip Morris International's (PM) combustible division is proving otherwise. In Q1, cigarette shipment volumes rose 1.1% to 144.8 billion units, and organic revenue increased 4%, fueled by an 8.3% price hike. Marlboro's enduring brand strength, along with a 0.4% market share gain to 24.8% (excluding the U.S. and China), highlights PM's pricing power and market resilience. Strategic local manufacturing has also helped preserve margins amid rising raw material costs. The results speak for themselves: combustible gross profit rose 5.3% organically, even with some headwinds from a commercial model change in Indonesia. PM's ability to raise prices without sacrificing volume underscores the strength of its brand. While the global cigarette market is shrinking by roughly 2% annually, PM's smart execution keeps the segment profitable, helping fund its transition to next-generation nicotine products. IQOS Ignites Heated Tobacco Business Unit If combustibles are PM's foundation, IQOS is the growth engine. Heated tobacco unit (HTU) shipments surged 14.4% to 37.1 billion units last quarter, while global in-market sales rose 9.4%, including a 9.3% increase in Japan, where IQOS now holds a commanding 32.2% market share. Europe is also a key growth driver, with countries such as Hungary (41.9%) and Greece (34.4%) reporting impressive market penetration. Backed by $14 billion in R&D since 2008, IQOS now delivers higher margins than cigarettes, proving the investment is paying off. The strength lies in PM's efficient scale and relentless innovation. Its multi-category approach—bolstered by launches like IQOS ILUMA in Japan—continues to deepen consumer loyalty. Even amid challenges like the EU flavor ban in Italy, PM has offset losses with strong double-digit growth in Spain and Germany. With 38.6 million adult users globally, IQOS is far from niche—it's a global force driving PM's next phase of growth. ZYN's Meteoric Rise Opens Door to Oral Segment Then there's ZYN, Philip Morris's nicotine pouch brand, which is rapidly gaining traction in the U.S. ZYN shipments soared 53% to 202 million cans last quarter, prompting the company to raise its full-year guidance to 800–840 million cans. International markets also contributed, with 53% growth in countries such as Pakistan and the UK. Thanks to margins exceeding 70%—about five points higher than those of combustibles—ZYN played a key role in helping smoke-free products contribute 44% of the total gross profit. Smart moves, such as early capacity expansions in March, ensured that supply kept up with demand. But ZYN isn't just a U.S. story—it's a global growth play. With 182% volume growth in non-Nordic international markets, PM is leveraging its global distribution muscle and FDA clearances to accelerate expansion. The 27.2% volume growth in Q1 reflects PM's successful pivot toward discreet, high-margin alternatives that resonate with younger consumers and working professionals. It's a textbook example of how to spot and capitalize on shifting consumer preferences. Not Too Pricey for the Growth After an 80% rally, you might expect Philip Morris to be overvalued— but its forward P/E of 23, based on projected 2025 adjusted EPS of $7.36–$7.49, tells a more nuanced story. While that's not cheap for a tobacco stock, PM is far from typical. With 12–14% organic EPS growth forecasted for 2025—driven by 20.4% growth in smoke-free revenue and a weak dollar amplifying its 90%+ international earnings—this valuation appears well-supported. The weak dollar, in particular, is an underappreciated tailwind, boosting earnings in key international markets, such as Japan and Europe. Add to that $180 million in Q1 cost savings and a $2 billion efficiency target by 2026, and PM is positioned to continue expanding margins despite headwinds such as tax pressures in India. Altogether, this creates a strong case for PM to deliver 15%+ EPS growth annually in the coming years, making today's valuation look not just justified, but compelling. Is PM Stock a Buy or Sell? Wall Street remains highly bullish on Philip Morris, with a Strong Buy consensus based on eight Buy and one Hold rating over the past three months, and notably, no Sell ratings. However, PM's average 12-month stock price target of $188.67 suggests a meagre 3.3% upside over the coming year. PM Reinvents Itself as a Smoke-Free Growth Powerhouse Philip Morris is no longer your grandfather's tobacco company. Its recent surge reflects a bold transformation toward smoke-free alternatives, with ZYN and IQOS driving growth while traditional cigarettes continue to generate solid cash flow. A weak dollar is further boosting its international-heavy revenue base, and with 12–14% EPS growth projected, PM's momentum looks far from accidental—it's the mark of a company redefining its future. While its P/E of 23 isn't bargain-basement, it's a reasonable price for a business evolving into a modern, high-margin growth story. In my view, PM still appears to be an attractive option.
Yahoo
5 days ago
- Business
- Yahoo
US Zyn boom pushed Philip Morris stock to a record. Wall Street still sees 'impressive growth' ahead.
Philip Morris International (PM) is riding the wave of smoke-free nicotine products with Zyn. The category has grown so much that convenience stores like Casey's (CASY) and Murphy USA (MUSA) have changed their shelves to cater to consumers looking for tobacco alternatives to satisfy their nicotine fix. "This is a multiyear growth story ... and there's a lot of potential there," CFRA analyst Garrett Nelson said in an interview. Zyn, which produces nicotine pouches without tobacco, was part of Philip Morris' acquisition of Swedish Match in late 2022. Zyn gained so much popularity in the US that it's facing a shortage that started in April 2024. The shortage will be over in the third quarter, the company said. "They are still a market share leader," Needham analyst Gerald Pascarelli said in an interview. "They've been capacity constrained because they were growing so rapidly ... they simply couldn't service the amount of demand." Shipment volumes of the product to the US increased from 132 million cans in Q1 2024 to 202 million in Q1 2025. Earlier this year, the FDA approved authorization to market 20 pouches per can under regulations that, among other things, would ensure that ads are targeted to adults ages 21 and older. Currently, nicotine merchants can sell 15 per can, with each individual pouch weighing 0.4 grams. (The total weight of the can is 6 grams.) Philip Morris' smoke-free business also includes heated tobacco products like IQOS and e-vapor products like Veev. In the most recent first quarter, it accounted for 42% of total net revenue. On June 13, Philip Morris International stock hit an all-time high record close of $184.33. Shares are up nearly 80% from a year ago. That's far more than what Nelson calls its "closest" competitor, Altria (MO), up more than 30%, which produces the brand called On! Nicotine Pouches. In the same period, the S&P 500 (^GSPC) was up roughly 11%. Philip Morris International's net revenue grew 5.8% in the first quarter to $9.3 billion. Smoke-free products like Zyn grew 15% to $3.9 billion; "combustibles," like cigarettes, showed flat growth at $5.4 billion. Gross profit grew 11.8% in the quarter to $6.3 billion overall, with smoke-free products specifically posting a 27.7% surge in gross profit to $2.7 billion. CFO Emmanuel Babeau told investors its gross profit was "fueled by the rapid growth of Zyn." In the US, the shipment volume of oral smoke-free products in pouches or pouch equivalents increased by 27.2%. Outside of the US, nicotine pouch volume also grew by 53% in emerging markets like South Africa and Europe, among others. "Nicotine pouches are relatively lightweight. You can ship a ton," Pascarelli said, adding that they are low-cost to make. The economy — boom, bust, or somewhere in between — won't be an issue, analysts said. "When you have a product that people like and is addictive ... consumers are willing to pay a premium," Nelson said. "Tobacco companies [are] being able to push through price increases very easily." One yellow flag: Is this the next Juul? "There was a ton of people underage that were vaping," Pascarelli said. That drew scrutiny from regulators because the products were flavored, which attracted younger users. Zyn uses flavors like wintergreen that are supposedly less ominous. "They're not these novel flavors (like mango) that really took off with the vapers" who skewed younger, he said. Convenience chains are benefiting too. Casey's General Stores CEO Darren Rebelez said he swapped out cigarettes with Zyn, moving them front and center in displays. Growth of the nicotine pouch business has doubled around 200% in the past two years and 54% in the last year alone. "It's growing a lot, and some of that is what our merchants have done to give it more exposure and to reset it ... we've helped to accelerate that," Rebelez said in an interview, adding that the "decline in cigarettes is real" as consumers experiment with other products. Earlier this year, convenience store 7-Eleven president Stan Reynolds told investors the company "made strategic investments" in expanding its tobacco offerings as "53% of adult smokers are looking to switch from cigarettes to noncombustible products." Once 7-Eleven made the switch, Reynolds said it has seen sales increase in the category. It's also making up half the loss in sales from the decline in cigarettes and is benefiting from higher margins. Per Philip Morris International, from 2012 to 2024, its cigarette shipment volume fell from 927 billion units to 617 billion units. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy
Yahoo
5 days ago
- Business
- Yahoo
US Zyn boom pushed Philip Morris stock to a record. Wall Street still sees 'impressive growth' ahead.
Philip Morris International (PM) is riding the wave of smoke-free nicotine products with Zyn. The category has grown so much that convenience stores like Casey's (CASY) and Murphy USA (MUSA) have changed their shelves to cater to consumers looking for tobacco alternatives to satisfy their nicotine fix. "This is a multiyear growth story ... and there's a lot of potential there," CFRA analyst Garrett Nelson said in an interview. Zyn, which produces nicotine pouches without tobacco, was part of Philip Morris' acquisition of Swedish Match in late 2022. Zyn gained so much popularity in the US that it's facing a shortage that started in April 2024. The shortage will be over in the third quarter, the company said. "They are still a market share leader," Needham analyst Gerald Pascarelli said in an interview. "They've been capacity constrained because they were growing so rapidly ... they simply couldn't service the amount of demand." Shipment volumes of the product to the US increased from 132 million cans in Q1 2024 to 202 million in Q1 2025. Earlier this year, the FDA approved authorization to market 20 pouches per can under regulations that, among other things, would ensure that ads are targeted to adults ages 21 and older. Currently, nicotine merchants can sell 15 per can, with each individual pouch weighing 0.4 grams. (The total weight of the can is 6 grams.) Philip Morris' smoke-free business also includes heated tobacco products like IQOS and e-vapor products like Veev. In the most recent first quarter, it accounted for 42% of total net revenue. On June 13, Philip Morris International stock hit an all-time high record close of $184.33. Shares are up nearly 80% from a year ago. That's far more than what Nelson calls its "closest" competitor, Altria (MO), up more than 30%, which produces the brand called On! Nicotine Pouches. In the same period, the S&P 500 (^GSPC) was up roughly 11%. Philip Morris International's net revenue grew 5.8% in the first quarter to $9.3 billion. Smoke-free products like Zyn grew 15% to $3.9 billion; "combustibles," like cigarettes, showed flat growth at $5.4 billion. Gross profit grew 11.8% in the quarter to $6.3 billion overall, with smoke-free products specifically posting a 27.7% surge in gross profit to $2.7 billion. CFO Emmanuel Babeau told investors its gross profit was "fueled by the rapid growth of Zyn." In the US, the shipment volume of oral smoke-free products in pouches or pouch equivalents increased by 27.2%. Outside of the US, nicotine pouch volume also grew by 53% in emerging markets like South Africa and Europe, among others. "Nicotine pouches are relatively lightweight. You can ship a ton," Pascarelli said, adding that they are low-cost to make. The economy — boom, bust, or somewhere in between — won't be an issue, analysts said. "When you have a product that people like and is addictive ... consumers are willing to pay a premium," Nelson said. "Tobacco companies [are] being able to push through price increases very easily." One yellow flag: Is this the next Juul? "There was a ton of people underage that were vaping," Pascarelli said. That drew scrutiny from regulators because the products were flavored, which attracted younger users. Zyn uses flavors like wintergreen that are supposedly less ominous. "They're not these novel flavors (like mango) that really took off with the vapers" who skewed younger, he said. Convenience chains are benefiting too. Casey's General Stores CEO Darren Rebelez said he swapped out cigarettes with Zyn, moving them front and center in displays. Growth of the nicotine pouch business has doubled around 200% in the past two years and 54% in the last year alone. "It's growing a lot, and some of that is what our merchants have done to give it more exposure and to reset it ... we've helped to accelerate that," Rebelez said in an interview, adding that the "decline in cigarettes is real" as consumers experiment with other products. Earlier this year, convenience store 7-Eleven president Stan Reynolds told investors the company "made strategic investments" in expanding its tobacco offerings as "53% of adult smokers are looking to switch from cigarettes to noncombustible products." Once 7-Eleven made the switch, Reynolds said it has seen sales increase in the category. It's also making up half the loss in sales from the decline in cigarettes and is benefiting from higher margins. Per Philip Morris International, from 2012 to 2024, its cigarette shipment volume fell from 927 billion units to 617 billion units. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy Sign in to access your portfolio
Yahoo
13-06-2025
- Business
- Yahoo
Philip Morris International (NYSE:PM) Declares US$1.35 Dividend; Appoints New U.S. Communications Officer
Philip Morris International recently announced a regular quarterly dividend of $1.35 per share and appointed Jody Sunna as the new U.S. Chief Communications Officer, reflecting the company's ongoing commitment to shareholder returns and strategic leadership. Over the last quarter, Philip Morris' stock price increased by 21%, a significant movement that may have been influenced by these affirmations coupled with the company's strong financial performance. During this period, the market faced volatility due to geopolitical tensions affecting broader indices, yet Philip Morris managed to post a positive return amidst these challenges, supporting the stock's resilience. We've spotted 2 warning signs for Philip Morris International you should be aware of. The end of cancer? These 23 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. The recent boost in Philip Morris International's shares by 21% in the last quarter may reflect investor confidence, partially driven by the announcement of a US$1.35 dividend per share and key leadership appointments. Over a longer five-year period, the company's total return, including dividends, reached a notable 220.66%. This indicates strong returns for investors. In comparison to the one-year U.S. market return of 11.7%, Philip Morris outperformed significantly. However, when viewed against the U.S. Tobacco industry, which posted a 30.8% return, Philip Morris' performance was also strong but not as high as the industry's. This recent news could potentially impact revenue and earnings projections, especially considering the anticipated hurdles and opportunities linked to its smoke-free products like IQOS and ZYN. These developments underscore the importance of these product segments for future growth. Analysts have set a consensus price target of US$177.15 for the stock, slightly above the current share price of US$175.36. This suggests a moderate discount of around 3.77%. The market expectations reflected in these targets might adjust if Philip Morris continues to leverage its pricing strategy and operational efficiencies successfully. Investors should consider the possible variability due to regulatory and market conditions affecting smoke-free product growth. According our valuation report, there's an indication that Philip Morris International's share price might be on the expensive side. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NYSE:PM. This article was originally published by Simply Wall St. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data
