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By Nate Johnstonbaugh | nrj6@psu.edu | February 10, 2019
Philip Morris International (PM) has had wide success in the tobacco industry, selling cigarettes and tobacco products in countries all throughout the world. Marlboro, perhaps their most recognized brand, is one of the leading products that has driven this company to success.
However, shares of Philip Morris stock fell roughly 33% last year. One of the main reasons for the spiraling of their share price is due to the large increase of vaping throughout the United States and other countries. Juul Labs, a popular e-cigarette company, dominated the tobacco market last year. They followed up their strong year by partnering with Altria, another established tobacco product company. This could cause concern for Philip Morris and their investors, but CEO André Calantzopoulos gave a few reasons why he’s not too worried.
Calantzopoulos believes that the future of vaping will be dominated by multiple companies, not just one industry giant. Basically, he thinks that there will be room for multiple products to coexist. Additionally, he believes that consumer choice will play a role in the tobacco industry going forward. Calantzopoulos believes that different products should have different advantages to different smokers and that this will keep Philip Morris in the game going forward. Lastly he believes relevancy is a key issue, which he isn’t worried about because the Marlboro brand is one of the most well known tobacco brands throughout the world.
Philip Morris stock has rebounded 14% year-to-date, and proves to be a very serious contender in the future of the tobacco industry.
I think there will be room for multiple tobacco companies as the future of vaping/smoking progresses. Owning the brand Marlboro will help Philip Morris stay relevant going forward, but I think the bigger issue for them to worry about will be government regulations and decline in smoking overall.
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