Tobacco stocks moved broadly higher Tuesday after the Food and Drug Administration (FDA) gave industry bellwether Philip Morris International Inc. (PM) approval to market its IQOS tobacco heating system as a safer alternative to traditional smoking. The agency said scientific studies found that moving to the IQOS system from cigarettes significantly reduces exposure to harmful chemicals.
The company’s CEO Andre Calantzopoulos believes that the decision gives consumers a less hazardous option for consuming tobacco. “IQOS is a fundamentally different tobacco product and a better choice for adults who would otherwise continue smoking,” he said, per Bloomberg. Meanwhile, Morgan Stanley analyst Pamela Kaufman said that the favorable marketing ruling opens the door to broader IQOS adoption in the United States.
Below, we take a closer look at Philip Morris and two other leading tobacco companies poised to benefit from the FDA’s decision. We’ll also analyze the chart of each firm to identify tactical trading opportunities.
Philip Morris International Inc. (PM)
Philip Morris sells IQOS products, including heated tobacco and nicotine-containing vapor products under brands such as HEETS and HEETS Marlboro, as well as Marlboro HeatSticks and Parliament HeatSticks. The tobacco giant reported that its first quarter heated tobacco shipment volumes rose to