UBS on Monday increased its 12-month price target for Philip Morris (NYSE:PM) to $181.50 from $158.00, but left its rating at Neutral. The move follows the tobacco company’s fourth-quarter 2025 results and the fiscal 2026 outlook that accompanied them.
In its review, UBS noted that Philip Morris reported fourth-quarter earnings per share that were 2% higher than consensus. The bank said the outperformance came despite an underlying shortfall in organic operating income growth in the Americas region, a gap that was effectively offset by lower tax expenses and reduced net finance costs.
UBS also flagged volumes for ZYN in the U.S. and for IQOS as broadly consistent with expectations. Management guided to a step-up in IQOS in-market sales growth to 12%, up from 10% recorded in the first nine months of 2025, a point UBS emphasized when assessing the company’s momentum in its smoke-free portfolio.
For fiscal 2026, Philip Morris provided EPS guidance in a range of $8.38 to $8.53, which sits above the consensus estimate of $8.33. That projection incorporates organic sales and operating income growth assumptions that are one percentage point below the company’s mid-term algorithm, the company said, with a stronger-than-expected foreign exchange tailwind helping to lift the EPS midpoint relative to consensus.
UBS estimated that consensus EPS could rise by 1-2% following the outlook. However, the bank cautioned that several factors could weigh on the stock’s near-term price performance: the company’s strong year-to-date share price appreciation, guidance for 2026 that is slightly below mid-term growth targets, smoke-free shipments expected in the high single digits versus a consensus of roughly 11%, and softer first-quarter 2026 guidance.
Additional analyst actions and company disclosures accompanied the quarterly release. Philip Morris reported fourth-quarter 2025 EPS of $1.70, in line with analyst expectations, and revenue of $10.4 billion compared with a consensus figure of $10.39 billion. After those results were disclosed, Stifel raised its price target to $200 from $180 and maintained a Buy rating, citing stronger-than-expected volume growth and expansion in operating profit margins.
Bernstein SocGen Group reiterated a Market Perform rating and kept a $175 price target, noting the company’s solid start to the year with shares up 13.5% year-to-date. Bernstein attributed that performance to a broader sector rotation into tobacco names and a weaker U.S. dollar, which has served as a tailwind for Philip Morris. The firm characterized the company’s position as reflecting robust financial health and favorable market positioning.
Clear summary
UBS raised Philip Morris’s price target to $181.50 while keeping a Neutral rating after the company beat Q4 EPS consensus by 2% and issued fiscal 2026 EPS guidance above consensus. UBS underscored that organic growth metrics are modestly below mid-term targets and that smoke-free shipment guidance and soft near-term guidance could temper share performance despite a positive FX headwind.
Key points
- UBS raised the price target on Philip Morris to $181.50 from $158.00 and maintained a Neutral rating.
- Philip Morris beat Q4 2025 EPS consensus by 2% and reported revenue of $10.4 billion, slightly above expectations.
- Fiscal 2026 EPS guidance of $8.38 to $8.53 exceeds consensus of $8.33 but embeds organic growth assumptions one percentage point below the company’s mid-term algorithm; FX provided a tailwind.
Risks and uncertainties
- Short-term stock reaction risk - Strong year-to-date share performance combined with guidance that is slightly below mid-term growth targets may prompt a muted or negative market response; this impacts equity investors in consumer staples and tobacco sectors.
- Operational growth risk - Organic operating income growth in the Americas missed underlying expectations in Q4, indicating potential volatility in regional operational performance that could affect sector margins.
- Shipment and near-term guidance risk - Smoke-free shipments guided to high single digits versus consensus of about 11%, and soft Q1 2026 guidance could weigh on investor sentiment and near-term revenue trajectories in the smoke-free product segment.
This report synthesizes the company’s reported results, guidance, and recent analyst responses. It presents the facts disclosed by Philip Morris and the interpretations shared by the cited brokerages without introducing additional data or forecasts.