Philip Morris is growth stock again, shares hit all-time high on Zyn demand

Philip Morris International shares reached record highs Tuesday after the tobacco company’s Zyn brand reported soaring demand.

Shares of the Connecticut-based company jumped above $130 at session highs, marking a new intraday record. The stock is also tracking to notch an all-time closing high and see its biggest one-day gain since March 2020.

Tuesday’s record comes after the company touted an eye-popping increase in shipments of its Zyn oral nicotine pouches. It’s the latest milestone in the stock’s breakout this year as Wall Street catches wind of how the product has captured consumer interest.

The stock saw little action between 2013 and 2023 with investors viewing it as a dividend play in a stagnant industry. Now, traders are seeing the stock as a growth name — thanks in large part to the success of Zyn since Philip Morris acquired the brand through its deal with Swedish Match two years ago.

“The No. 1 U.S. smoke-free brand continued to see very strong underlying momentum,” finance chief Emmanuel Babeau told analysts on a call Tuesday.

Zyn demand in the U.S. has primarily driven shipments of Philip Morris’ oral products up nearly 40% in the first nine months of 2024, compared with the same period of the prior year.

Part of that growth is due to easing supply constraints for the product. Shipments of Zyn cans in the U.S. rose more than 41% in the third quarter from the same three-month period in 2023. Philip Morris expects Zyn shipments to match demand “at some point” during the fourth quarter, Babeau said.

Growth is also taking place internationally, with total nicotine pouch volume outside America soaring almost 70% between the third quarters of 2023 and 2024. Zyn is now available in 30 markets after the brand’s recent expansions into Greece and the Czech Republic.

Philip Morris also noted Zyn as main driver of net revenue for the business as a whole. The company issued better financial results than analysts polled by FactSet expected on both lines for the third quarter, while also raising its full-year earnings per share outlook.

Zyn has become a symbol of the shift among tobacco companies toward alternatives to traditional cigarettes. Philip Morris announced earlier this year that it would invest $600 million to build a new production facility for Zyn in Colorado.

Shares of Philip Morris have climbed more than 37% in 2024. That would mark the best year on record for the company, which was separated in 2008 in part because of smoker lawsuits. Philip Morris kept the international cigarettes business which was still growing. Shares of Altria, which kept the U.S. cigarettes unit, have struggled since, still far below an all-time high reached in 2017.