Latest news with #PhilipMorris
NZ Herald
a day ago
- Business
- NZ Herald
Government extends tax break for Philip Morris heated tobacco products
'This Government has the wrong priorities. It is giving tax breaks to tobacco companies now valued at over $300 million and the evaluation they promised, to check that it was helpful, is a total sham.' Labour's Ayesha Verrall criticised the extension, citing health system strain and a $300 million cost. Photo / Getty Images Costello cut the HTP tax rate by 50% last year, with the aim that cheaper prices may encourage people to switch from cigarettes to HTPs. The cut was made despite health officials telling Costello there was no evidence HTPs worked to stop people smoking or were significantly safer than cigarettes. Costello told Cabinet she had her own 'independent advice', which, when she released it later, turned out to be five articles that were either about different products, outdated, or offered only weak support for her view. Treasury said Philip Morris had a monopoly in the HTP market in New Zealand and would be the main beneficiary of the move. NZ First's Casey Costello is under fire for extending HTP tax cuts for another year, favoring tobacco giant Philip Morris. Photo / Getty Images Costello's office told RNZ the tax cut trial would be extended because Philip Morris had to pull its IQOS device from sale last year, as it did not comply with requirements for vaping devices to have a removable battery. Last week, Costello ditched the requirement for removable batteries, saying Cabinet was advised this was the best way to resolve legal action from Mason Corporation, which owns the Shosha vape store chain. A spokesman for the minister said with HTPs off the market for months last year, the original plan for an evaluation after one year did not make sense. 'There wasn't an evaluation because of the withdrawal of HTPs from the market. Any report back would be meaningless as the cheaper HTPs were only available for two months,' the spokesman said. 'Cabinet agreed to extending the HTP review to July 2027 as there will be more market data available.' The spokesman said the evaluation would then be able to show whether 'a sustained price reduction encouraged uptake by smokers' and if it had helped reduce smoking. The assessment would also look at whether HTP use 'encouraged smokers away from vapes' and the extent of 'unintended uptake by young people'. A March 2025 Ministry of Health (MOH) briefing to Costello, focused on how to evaluate the HTP tax cut, said Philip Morris had not initially passed on the excise reduction to consumers. 'There was no price change passed through to customers for the first month, though this is an observation of value in and of itself,' the MOH said. The briefing, obtained by RNZ under the Official Information Act, said Philip Morris had to pull its IQOS device just three months into the tax cut trial. 'All HTP devices were removed from the market in New Zealand due to not meeting new safety regulations. This has meant there have been no HTP devices available for purchase for at least five months of the 12-month trial period.' Costello has said that HTPs 'have a similar risk profile to vapes', but officials from Treasury and Ministry of Health advised her they were much more harmful than vaping. In its March briefing, the MOH told Costello it would be difficult to assess whether people using HTPs had decreased their harm or not. 'While we will be able to assess whether the percentage of current or recent smokers who use HTPs increases, we will not be able to track whether those same people were previously using, or likely to use vapes, for example, whether they moved from a safer alternate product to a more harmful one.' Verrall said the onus should be on Philip Morris to prove its product was safe. 'There is no reason why the government should be running a study for Philip Morris to help get its products used,' she said. 'This product is not a health product. It is a harmful product.' Verrall said the latest update from the Treasury showed the HTP tax cut was forecast to cost up to $293m if continued until 2029. 'It's deeply worrying when our health system is underfunded that the Government is giving away $300m to the benefit of a single company with links to one of the coalition partners,' Verrall said. The extension of the tax break for the Philip Morris products comes after RNZ published documents alleging a close relationship between NZ First and the tobacco giant. The documents, released in litigation against US vaping company JUUL, allege Philip Morris pitched draft legislation to NZ First as part of a lobbying campaign for its HTPs. The documents claim Philip Morris corporate affairs staff 'reached out to NZ First to try and secure regulation to advantage IQOS'. A lobbying firm advising Juul claimed that NZ First leader Winston Peters had a relationship with Philip Morris and also that 'any regulation he champions is likely to be very industry-friendly and highly geared towards commercial interests in the sector'. Peters did not address the allegations that NZ First received material from Philip Morris, but said RNZ's story was a 'tissue of baseless accusations' and that engagement with the tobacco industry was legitimate. 'Multiple government departments have themselves proactively reached out to, and met with, 'big tobacco' for direct feedback and advice on tobacco legislation,' he said, in a post on X. Health Coalition Aotearoa and Vape-Free Kids want Prime Minister Christopher Luxon to strip NZ First of the tobacco and vaping portfolio but he says Costello is doing a great job.
Yahoo
2 days ago
- Business
- Yahoo
UBS Raises Philip Morris (PM) Price Target on Smoke-Free Margin Growth
Philip Morris International Inc. (NYSE:PM) ranks among the . While maintaining its Neutral rating on Philip Morris International Inc. (NYSE:PM), UBS increased its price target for the tobacco giant's stock from $170 to $181 on July 14. The price target increase is in line with UBS's revised earnings per share estimates, which were increased by 0.4% for fiscal year 2025, 5.1% for fiscal year 2026, and 5.0% for fiscal year 2027. Copyright: jetcityimage / 123RF Stock Photo UBS emphasized Philip Morris's impressive growth in Smoke-Free gross margins, which are expected to rise from 60.7% in fiscal year 2022 to 70.9% in fiscal year 2025. This improvement is bolstered by scale/productivity gains from IQOS and U.S. ZYN products, which have margins of about 85%. With fiscal year 2025 projections of 873 million cans and $2.9 billion in revenues, the firm observed robust volume growth for ZYN in the US market, aided by inventory replenishment. Philip Morris International Inc. (NYSE:PM) is a global tobacco company that provides services to consumers in over 180 countries. With Marlboro as its signature product, the firm stands out among the titans of 'Big Tobacco.' While we acknowledge the potential of PM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. Read More: and Disclosure: None.
Otago Daily Times
2 days ago
- Health
- Otago Daily Times
Controversial tobacco tax cut extended
NZ First's Casey Costello is the minister responsible for tobacco policy. Photo: RNZ The tax break for Heated Tobacco Products (HTPs) made by Phillip Morris has been extended for an extra two years. In July 2024, the government cut the tax on HTPs in half, in what it said would be a one-year trial subject to an evaluation. But NZ First Associate Health Minister Casey Costello told RNZ the evaluation would now be done in July 2027 and the reduced tax rate would apply to HTPs at least until then. Labour's health spokesperson Ayesha Verrall said the extension of the tax cut was striking, given the strain on the health system. "This government has the wrong priorities. It is giving tax breaks to tobacco companies now valued at over $300 million and the evaluation they promised, to check that it was helpful, is a total sham." Costello cut the HTP tax rate by 50 percent last year, with the aim that cheaper prices may encourage people to switch from cigarettes to HTPs. The cut was made despite health officials telling Costello there was no evidence HTPs worked to stop people smoking or were significantly safer than cigarettes. Costello told Cabinet she had her own "independent advice" which, when she released it later, turned out to be five articles that were either about different products, outdated, or offered only weak support for her view. Treasury said Philip Morris had a monopoly in the HTP market in New Zealand and would be the main beneficiary of the move. Costello's office told RNZ the tax cut trial would be extended because Philip Morris had to pull its IQOS device from sale last year, as it did not comply with requirements for vaping devices to have a removable battery. Last week, Costello ditched the requirement for removable batteries, saying Cabinet was advised this was the best way to resolve legal action from Mason Corporation, which owns the Shosha vape store chain. A spokesman for the Minister said with HTPs off the market for months last year, the original plan for an evaluation after one year did not make sense. "There wasn't an evaluation because of the withdrawal of HTPs from the market. Any report back would be meaningless as the cheaper HTPs were only available for two months," the spokesman said. "Cabinet agreed to extending the HTP review to July 2027 as there will be more market data available." The spokesman said the evaluation would then be able to show whether "a sustained price reduction encouraged uptake by smokers" and if it had helped reduce smoking. The assessment would also look at whether HTP use "encouraged smokers away from vapes" and the extent of "unintended uptake by young people". A March 2025 Ministry of Health (MOH) briefing to Costello, focused on how to evaluate the HTP tax cut, said Philip Morris had not initially passed on the excise reduction to consumers. "There was no price change passed through to customers for the first month, though this is an observation of value in and of itself," the MOH said. The briefing, obtained by RNZ under the Official Information Act, said Philip Morris had to pull its IQOS device just three months into the tax cut trial. "All HTP devices were removed from the market in New Zealand due to not meeting new safety regulations. This has meant there have been no HTP devices available for purchase for at least 5 months of the 12-month trial period." Costello has said that HTPs "have a similar risk profile to vapes", but officials from Treasury and Ministry of Health advised her they were much more harmful than vaping. In its March briefing, the MOH told Costello it would be difficult to assess whether people using HTPs had decreased their harm or not. "While we will be able to assess whether the percentage of current or recent smokers who use HTPs increases, we will not be able to track whether those same people were previously using, or likely to use vapes, for example, whether they moved from a safer alternate product to a more harmful one." Verrall said the onus should be on Philip Morris to prove its product was safe. "There is no reason why the government should be running a study for Philip Morris to help get its products used," she said. "This product is not a health product. It is a harmful product." Verrall said the latest update from the Treasury showed the HTP tax cut was forecast to cost up to $293 million if continued until 2029. "It's deeply worrying when our health system is underfunded that the government is giving away $300 million to the benefit of a single company with links to one of the coalition partners," Verrall said. The extension of the tax break for the Philip Morris products comes after RNZ published documents alleging a close relationship between NZ First and the tobacco giant. The documents, released in litigation against US vaping company JUUL, allege Philip Morris pitched draft legislation to NZ First as part of a lobbying campaign for its HTPs. The documents claim Philip Morris corporate affairs staff "reached out to NZ First to try and secure regulation to advantage IQOS". A lobbying firm advising JUUL claimed that NZ First leader Winston Peters had a relationship with Philip Morris and also that "any regulation he champions is likely to be very industry friendly and highly geared towards commercial interests in the sector". Peters did not address the allegations that NZ First received material from Philip Morris, but said RNZ's story was a "tissue of baseless accusations" and that engagement with the tobacco industry was legitimate. "Multiple government departments have themselves proactively reached out to, and met with, 'big tobacco' for direct feedback and advice on tobacco legislation," he said, in a post on X. Health Coalition Aotearoa and Vape-Free Kids want Prime Minister Christopher Luxon to strip NZ First of the tobacco and vaping portfolio but he says Costello is doing a great job.
Yahoo
3 days ago
- Business
- Yahoo
Philip Morris International Shares Tumble: Time to Run for the Hills or Buy the Dip?
Key Points Philip Morris International shares fell after the company's second-quarter report, despite strong earnings and increased EPS guidance. The company is expecting to see cigarette sales volumes decline in the second half. The real story at Philip Morris is about the continued strong growth of Zyn and Iqos. 10 stocks we like better than Philip Morris International › Philip Morris International (NYSE: PM) stock has had a strong 2025 so far, but the shares pulled back after the company reported its second-quarter results. That dip left the stock up about 36% on the year, as of this writing. Is the recent slide a buying opportunity or should investors be running for the hills? Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » Strong volume growth The Zyn brand remains the driving force behind Philip Morris' robust sales growth. Shipments of the popular nicotine pouches jumped 40% in the U.S. to 190 million cans in Q2, while retail sales volumes (offtake) grew by 26% in the quarter and by 36% in June. Outside of the U.S. and Nordic countries, Zyn shipments more than doubled, and it is now available in 44 markets. Overall oral product shipments climbed 23.8% on a pouch basis. The company said Zyn restocking in the U.S. is now effectively complete. It continues to expect U.S. Zyn shipments to be between 800 million and 840 million cans for the year. Image source: Getty Images The rest of Philip Morris' smokeless portfolio also performed well. Sales volumes of its heated tobacco units (HTUs), including the Iqos system, jumped nearly 9.2% to 38.8 billion units. The company said in-market sales (to end users) jumped 11.4%. Iqos continues to perform well in Japan and Europe and is seeing strong growth in other major cities outside its two main markets. Philip Morris also once again saw shipment growth more than double for its e-vapor product, Veev, driven by pod growth in Europe. Veev is now in 42 markets and holds the No. 1 market share in six European markets. Traditional cigarette volumes, meanwhile, fell by 1.5% to 155.2 billion units. Segment organic revenue, however, grew 2% to $6 billion, and gross profits for the category climbed 5% to $4 billion, as the company's price hikes more than compensated for those volume declines. Overall, organic revenue, which excludes currency effects, acquisitions, and dispositions, rose 6.8% year over year to $10.1 billion. Adjusted earnings per share (EPS) climbed 20% to $1.91. Oral Products (Zyn) HTUs Cigarettes Smoke-Free Total Volume growth 23.8% 9.2% (1.5%) N/A 1.2% Organic revenue growth N/A N/A 2% 14.5% 6.8% HTUs = heated tobacco units. Management maintained its full-year guidance for organic revenue while upping its adjusted EPS forecast. It continues to expect strong results from both Zyn and Iqos, but expects a 3% to 4% decline in traditional cigarette volumes due to ongoing issues in Turkey and Indonesia. The headwind in Turkey is related to supply chain issues following a change in regulatory requirements, while in Indonesia, it's battling to keep market share in the face of growing sales of illicit cigarettes. However, it's still expecting solid gross profit growth from its combustible tobacco business due to its pricing power and cost efficiencies. Metric Prior Guidance Updated Guidance Organic revenue growth 6% to 8% 6% to 8% Adjusted EPS $7.01 to $7.14 $7.43 to $7.56 Adjusted EPS growth* 10.5% to 12.5% $7.33 to $7.46 Volume growth 2% 1% Data source: Philip Morris International. *Adjusted EPS growth excludes currency exchange impacts. EPS = earnings per share. Should investors buy the dip? While investors may have been disappointed by Philip Morris' forecast for steeper declines in cigarette sales volumes in the second half, about half of that is due to a temporary issue around its Turkish supply chain. Meanwhile, the big reason to own the stock is its smoke-free portfolio, led by Zyn and Iqos. Both products continue to demonstrate strong growth and have better unit economics than Philip Morris' traditional cigarette business. It's also expanding these products to new markets, with early signs of success. Importantly, the company is hoping that the FDA will approve the Iqos Iluma for sale in the U.S. later this year, which would set it up to enter this market now that it has reacquired its U.S. rights from Altria. From a valuation perspective, the stock got cheaper when management raised its EPS guidance and its share price fell. The stock now trades at a forward price-to-earnings (P/E) ratio of under 22, based on the analyst consensus for 2025, with a PEG (price/earnings-to-growth) ratio of under 0.35. Stocks with positive PEG ratios below 1 are generally viewed as undervalued. While at the current share price, Philip Morris' dividend has a nice 3.3% forward yield, that's not as high a yield as other tobacco stocks. However, what it lacks in yield, it makes up for by being a unique growth stock in a defensive industry. This is a stock you'll want to own over the long haul, and the dip in the stock price offers a nice buying opportunity. Should you invest $1,000 in Philip Morris International right now? Before you buy stock in Philip Morris International, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Philip Morris International wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,628!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,063,471!* Now, it's worth noting Stock Advisor's total average return is 1,041% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 21, 2025 Geoffrey Seiler has positions in Philip Morris International. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.
Otago Daily Times
5 days ago
- Health
- Otago Daily Times
Peters challenged on tobacco links
Public health researchers at the University of Otago have called on the prime minister to show some leadership and remove the tobacco and vaping portfolio from New Zealand First, following allegations the party has been colluding with tobacco giant Philip Morris. Documents from a Radio NZ investigation show Philip Morris provided NZ First with a draft piece of regulation which the deputy prime minister at the time, Winston Peters, supported. They show NZ First assured Philip Morris they would "put that draft into the policy mix". Mr Peters said the documents referenced were more than six years old, and the attempt to attack NZ First was "old, stale, repetitive, and utterly baseless". The allegation comes after NZ First list MP and Associate Health Minister Casey Costello led the repeal of the Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Act 2022. It effectively scrapped laws aimed at slashing tobacco retailers, removing 95% of the nicotine from cigarettes, and creating a smokefree generation by banning sales to those born after 2009. University of Otago Aspire Aotearoa Research Centre co-director and public health researcher Prof Janet Hoek said the fact the documents were six years old was "neither here nor there", because NZ First had repeatedly denied having any connections with the tobacco industry. The revelation raised questions about how easily companies were able to access politicians, and the kind of lobbying that went on behind closed doors. "The challenge that he [Mr Peters] has to address is that there have been allegations that he's been dealing with tobacco companies and using their documents to inform policy. "None of his statements, none of his rebuttals, address that concern. "What we need is some transparency — some actual evidence showing that these allegations that have been put forth in the documents don't stand, and that's not what he's been able to provide. "I think he really needs to be held to account here." She said Mr Peters' instinctive response was "attack is the best defence". "I think there's actually a real question about integrity of the political process here, and what people want to feel is that politicians are acting in the best interest of the country, not the best interest of the tobacco company." Prof Hoek said the "discrepancy" was further decreasing trust in the government, and called on Prime Minister Christopher Luxon to assert some leadership and removed the tobacco and vaping portfolio from NZ First, and entrust it to a politician without alleged links to tobacco giants. "We know that tobacco companies operate in the shadows by lobbying politicians. "What these documents reveal are claims that tobacco companies are not just lobbying, they are writing policy. "The New Zealand public will be disgusted to learn that is how the party that should be promoting public health is allegedly behaving." Fellow Aspire co-director Prof Richard Edwards said the repeal of New Zealand's world-leading smokefree legislation prompted a huge outcry from communities affected by smoking, health organisations, health professionals and public health experts. "The repeal raised questions about influence of the tobacco industry. "Subsequent industry-friendly policies like tax cuts for heated tobacco products only increased those concerns, and the recent revelations of close links between NZ First and Philip Morris suggest these concerns were well-founded." He called for the urgent reintroduction of the repealed measures, which were very likely to rapidly reduce the enormous harm from smoking, and protect future generations from smoking. Asked to respond to the accusations, a spokesman for Mr Peters pointed to a social media post online. In it, Mr Peters said the documents referenced were more than six years old, and the "attempt to attack NZ First is old, stale, repetitive, and utterly baseless". He said multiple government departments had themselves proactively reached out to "big tobacco" for direct feedback and advice on tobacco legislation. He accused Radio NZ of being "clearly lefty biased", and their "bottom-of-the-barrel attack reporting" had caused New Zealanders to lose trust in them and switch to other stations. "The smokefree legislation that we implemented is working," he said. "New Zealand First is proud of the smokefree legislation, which is backed by Action for Smokefree 2025 (ASH), that we have implemented and that we are still implementing."
