Philip Morris International Inc. (PM) is a global tobacco and nicotine company based in Stamford, Connecticut. It markets well-known cigarette brands, including Marlboro, and is transitioning towards smoke-free products with its “Beyond Nicotine” strategy. Its smoke-free product, IQOS, utilises heat-not-burn technology and is widely adopted globally. It operates in over 180 markets, focusing on reducing smoking’s health impact by investing in alternatives and advanced nicotine delivery systems.
From the all-time low of $32 in March 2009, PM’s stock price surged over 475%, peaking at $186 in June. The stock completed a 3-swing structure and is expected to evolve into at least a 5-swing chart, with wave (III) potentially targeting $204 or higher. Waves I and II of (III) ended at the February 2022 high and the September 2022 low. Wave III of (III), from September 2022, peaked in June 2025 and underwent a pullback.
On 29th October 2025, price reached the blue box zone and bounced back, indicating the start of wave V. The target for wave V is between $197-$215. On 29th December 2025, the price retested the blue box and surged, reaching the first target at $163.5 and potentially extending to $180-$200. This cycle from October’s low is projected to reach $215.
With the price of Philip Morris having bounced firmly from the October 2025 low, our initial target has been met, effectively creating a risk-free position for those who entered earlier. The recent retest of the buy zone followed by a strong upward move suggests the next leg of the rally is underway. We now see this as an opportunity to add to bullish positions, as the path of least resistance appears to be higher.
This technical strength is supported by strong fundamental performance, as seen in the company’s last quarterly report from October 2025. In that report, the user base for its smoke-free product, IQOS, grew to over 33 million, driving smoke-free products to account for nearly 40% of total net revenues. This continued momentum in the company’s core strategic shift provides a solid foundation for the bullish outlook.
For the coming weeks, we should consider longer-dated call options to capitalize on the expected move towards the $180-$200 range. Options with expirations in March or April 2026 would provide enough time for the trade to develop while avoiding rapid time decay. Strike prices around $170 or $175 could offer a good balance of risk and reward as this new upward wave gains traction.
Any short-term pullbacks should be viewed as buying opportunities rather than signs of weakness. We can look to history, such as the powerful rally that began after the March 2020 low, which saw the stock gain over 50% in the following year. The current setup from the October 2025 bottom shows similar characteristics, suggesting a move of comparable strength and speed is possible.
As the price continues to climb, implied volatility may increase, benefiting long call positions. We will monitor the price action closely as it approaches the previous all-time high set in June 2025. Pushing through this level would signal a significant breakout and clear the way for our ultimate target.
The overall cycle that began in October is projected to reach the $215 price level. This serves as our final profit-taking zone for this long-term trade. Until then, we will manage the position by taking partial profits at key resistance levels while letting the core trade run.
