Philip Morris International's Heavy Investment in ZYN Expected to Drag on Near-Term US Profit, Needham Says

02:52 PM EDT, 10/22/2026 (MT Newswires) -- Philip Morris International's (PM) heavy investment in its nicotine pouch brand ZYN is expected to drive a 10% growth in selling, general, and administrative expenses sequentially and implies US operating companies income of zero to slightly negative in Q4, Needham said in a Thursday note. Philip Morris reported Q3 adjusted earnings Wednesday of $2.36 per diluted share on revenue of $11.44 billion. Analysts surveyed by FactSet expected EPS of $2.30. on revenue of $11.32 billion. Elevated investment spending on ZYN in the US is seen persisting into 2027, but the company's strength in combustibles and international smoke-free products is expected to keep it on pace to deliver on its medium-term targets despite the drag on near-term US operating companies income, Needham analysts said. Needham reiterated the company's stock rating at buy and increased the price target to $220 from $215. Price: 200.92, Change: +3.45, Percent Change: +1.75