Philip Morris International (MEX:PM) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Philip Morris International had a gross margin of 68.06% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Philip Morris International Gross Margin % Related Terms
Philip Morris International Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Tobacco subindustry, Philip Morris International's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Philip Morris International Gross Margin % vs Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, Philip Morris International's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Philip Morris International's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Philip Morris International (MEX:PM) has a Gross Margin % of 68.06% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Philip Morris International and its competitors. This is near median its historical median of 64.77. Over the past decade, Philip Morris International's Gross Margin % has ranged from 63.35 to 68.06. According to the industry distribution chart, Philip Morris International ranks #4 out of 47 companies in the Tobacco Products industry, placing it in the top 8.5%.
Is Philip Morris International's Gross Margin % too high?
Philip Morris International's current Gross Margin % of 68.06% is near median its 10-year median of 64.77. Over the past 10 years, this metric has ranged from a low of 63.35 to a high of 68.06. The Tobacco Products industry median Gross Margin % is 33.29. Philip Morris International's value of 68.06% is 104.4% above this industry median. Based on the distribution chart, Philip Morris International ranks #4 out of 47 companies in the Tobacco Products industry, which is in the top quartile — a strong position relative to peers. Overall, Philip Morris International has a GF Score™ of 75/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Philip Morris International's Gross Margin % compare to MO and TPB?
According to the Tobacco Products industry distribution chart, Philip Morris International ranks #4 out of 47 companies for Gross Margin %. This places Philip Morris International in the top 9% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 33.29. Philip Morris International's value of 68.06% is 104.4% above this benchmark. Historically, Philip Morris International's own Gross Margin % has ranged from 63.35 to 68.06 over the past decade. While the company's 10-year median is 64.77 vs. the industry median of 33.29, Philip Morris International has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Tobacco Products company?
The median Gross Margin % among Tobacco Products companies is 33.29, based on 47 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Philip Morris International's current Gross Margin % of 68.06% is 104.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Philip Morris International and its competitors. For the Tobacco Products industry, the median Gross Margin % is 33.29 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Philip Morris International's current Gross Margin % is 68.06%, which is near median its own 10-year median of 64.77. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Philip Morris International stock overvalued right now?
Based on GuruFocus' analysis, Philip Morris International (MEX:PM) is currently considered Modestly Overvalued. The stock's GF Value™ is MXN2,495.54, compared to a current price of MXN3,123.00 — trading 25.1% above its estimated fair value. The current Gross Margin % is 68.06%, which is near median its 10-year median of 64.77 and 104.4% above the Tobacco Products industry median of 33.29. Philip Morris International's overall GF Score™ is 75/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Philip Morris International (MEX:PM), the current Gross Margin % is 68.06% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Philip Morris International (MEX:PM) Overvalued in 2026?
Based on GuruFocus' analysis, Philip Morris International stock appears to be overvalued.
The current stock price of MXN3,123.00 is trading 25.1% above its estimated GF Value™ of MXN2,495.54.
GuruFocus considers Philip Morris International to be Modestly Overvalued.
Key valuation signals for MEX:PM:
Gross Margin %: 68.06% (near median its 10-year median of 64.77)
GF Value™: MXN2,495.54 vs. price of MXN3,123.00 (25.1% above fair value)
Industry Position: 104.4% above the Tobacco Products median (#4 of 47)
No single metric tells the full story. See the MEX:PM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Created from the international operations of Altria in 2008, Philip Morris International sells cigarettes and reduced-risk products, including heat sticks, vapes, and oral nicotine offerings, primarily outside of the US. With the 2023 acquisition of Swedish Match, a leading manufacturer of traditional oral tobacco products and nicotine pouches primarily in the US and Scandinavia, PMI is not only dominant in smokable products but also has the Iqos and Zyn brands, which respectively dominate heated tobacco and nicotine pouches in most markets. It also owns the Veev brand in vapes.
75GF Score
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