Investors have been lighting up with joy over Philip Morris's recent performance. The company has consistently outperformed forecasts and increased its outlook, fueled by the success of products like ZYN and rising cigarette prices.

As a result, shares have soared by about 36% this year, with an additional 4% boost this morning.

ZYN, the nicotine pouch that's become a hit among U.S. consumers seeking alternatives to smoking, has made a remarkable comeback after last year's supply hiccups. Its U.S. shipment volume surged by 53% compared to the previous year, with a 42% increase in the fourth quarter alone.

Philip Morris Brought IQOS to Texas

Meanwhile, the company's flagship heated tobacco device, IQOS, continues to gain traction in regions like Europe and Japan. It made its U.S. debut in Texas earlier this year, priced at $60 each. This marked the company's first step in establishing a foothold for its flagship product in the United States, the world's largest market for smoking alternatives.

PMI has ambitious plans, aiming to secure a 10% share of the U.S. tobacco and heated tobacco market by 2030. The company hopes to attract a significant number of new users to its innovative product, which has already gained popularity globally.

The IQOS device is available for $60, with accompanying tobacco sticks priced at $8. For comparison, a pack of Marlboro cigarettes was priced at $9.62 before taxes at the end of 2024, according to Altria, the manufacturer. Francisca Rahardja, PMI U.S.'s Vice President and Chief Marketing Officer for inhalables, explained that the lower price point in Austin is part of a strategy to entice new consumers.

The company is rolling out an older version of the device while awaiting FDA approval for its latest model, ILUMA. The FDA has already authorized the sale of the older device, recognizing its potential to reduce exposure to harmful chemicals compared to traditional cigarettes.

Philip Morris is investing heavily in its smoke-free portfolio, aiming for half of its sales to come from these products by the end of 2025. CEO Jacek Olczak expressed confidence in the company's ability to deliver strong results despite global economic uncertainties. He now forecasts double-digit adjusted diluted EPS growth in dollar terms for the full year.

The company has revised its adjusted annual profit expectations to a range of $7.36 to $7.49 per share, up from the previous forecast of $7.04 to $7.17. In the first quarter, Philip Morris's revenue rose by 5.8% to $9.30 billion, surpassing analysts' average estimate of a 3.8% increase to $9.13 billion, according to LSEG data.

The company reported an adjusted profit of $1.69 per share, beating analysts' expectations of $1.61 per share.