The company expects such advanced and high-quality products to aid adult smokers in switching from traditional cigarettes to smoke-free options. These next-generation devices are backed by substantial scientific insights and research. To this end, the IQOS, its heat-not-burn device, counts among one of the leading RRPs in the industry. The company is well-placed to become a majority smoke-free company by 2025. PM is progressing well with its business transformation, with smoke-free products generating 35.4% of the company’s net revenues in the second quarter of 2023. Factors Working WellĬonsumers have been increasingly moving toward reduced-risk products (RRPs) or smoke-free alternatives, driven by the growing awareness of the health risks associated with traditional cigarette smoking.
The company also outpaced the broader Zacks Consumer Staples sector’s growth of 1.8% in the same period. Shares of this tobacco giant have risen 6.6% in the past year compared with the industry’s growth of 4.3%. These upsides have been working well for this Zacks Rank #3 (Hold) company amid cost inflation and soft cigarette volumes. PM stands in a favorable position to continue benefiting from its range of smoke-free products and competitive pricing strategy.
