Philip Morris International has recovered sharply since last week's note, closing at $178.49 — up 2.8% on the week and now within striking distance of the consensus target, with short sellers quietly trimming exposure as the next earnings date approaches.
The clearest shift in positioning is in short interest. Bears have been covering, not building. Short interest has fallen roughly 4.3% over the past week to just 1.05% of the free float — the lowest reading in the 30-day window — continuing a gradual bleed-down that started in late May when positions were running near 1.7% of float. The borrow market is entirely unstressed: availability is near the maximum, meaning supply for new shorts is essentially unlimited. Borrowing costs ticked up about 13% on the week to 0.49%, but that is still close to risk-free territory in absolute terms. There is no squeeze pressure here, and no evidence of meaningful directional conviction from the short side.
Options positioning has also eased from the extreme that was flagged a week ago. The put/call ratio was 1.16 when the prior note was filed; it has since come back to 1.11, now barely above its 20-day average of 1.11 and with a z-score near zero. The one-year high of 1.16 — hit on June 1 — has faded. Protective demand is no longer running at an unusual level. Combined, the lending and options picture now looks genuinely benign rather than defensively charged.
The Street's direction of travel remains constructive. Morgan Stanley's Eric Serotta lifted his target to $200 from $190 on June 3 — a move flagged last week that is worth anchoring in context: at $178.49, the stock has now gained roughly 2.8% since that note, closing part of the gap to his target. The consensus mean sits at $193.86. Bulls point to IQOS and Zyn volume momentum, pricing power on combustibles, and the Swedish Match nicotine pouch business as the growth engines for 2026 and beyond. The bear case centres on a projected 3% decline in combustible volumes, an upcoming excise tax increase on IQOS in Japan, and U.S. ZYN destocking risk that could weigh on smoke-free revenue growth. UBS remains the outlier on the Street with a $168 Neutral target. On a trailing P/E of 20.5x and EV/EBITDA of 16.4x, the stock is not cheap for a tobacco name — and the dividend factor score ranks in the 98th percentile, underscoring how much of the total-return case rests on yield rather than multiple expansion.
Peer tobacco names have broadly tracked PM's rebound this week. MO gained 3.4% over the same period, a slightly stronger performance, while TPB bucked the trend and slipped 1.6%. BATS and IMB were essentially flat, up just 0.2% and 2.6% respectively. PM's move has not been idiosyncratic — the sector has lifted across the board — but PM has held pace with its closest peer on total price appreciation.
Earnings are due July 22. The prior two prints produced outsized moves — Q1 results in April triggered a 10.4% one-day gain, and the May update added another 1% on the day before running 10.9% over the following week. Those reactions will set the reference frame for how options market pricing evolves into the release, making the trajectory of the PCR between now and mid-July worth watching.
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