⚠ Currency: The Price Cut Nobody ChoseModerate threat

Philip Morris International (PM) — threat to the moat

Currency cost PMI 77 cents of adjusted earnings per share in 2022 and has added 24 cents in 2026, a swing larger than most price rises.

PMI prices in local currencies and reports in dollars, and the conversion can undo a year of price rises. The company names its primary currency exposures as the euro, Indian rupee, Indonesian rupiah, Japanese yen, Russian ruble and Swiss franc1. Its costs are partly in Swiss francs, where its executives are paid2.

Currency effect on adjusted EPS ($)-0.772022-0.382024+0.242026 guidedPMI CAGNY 2026 slides; Barclays conference release, September 2026
From a 77-cent drag to a 24-cent lift.

The effect is large. PMI's own chart puts the currency cost to adjusted earnings per share at 77 cents in 2022 and 38 cents in 20243. In 2026 the direction reversed: the September guidance update raised the reported earnings forecast to reflect currency only, with a benefit of 24 cents4.

Currency does not change the moat, but it changes what the moat earns in dollars for a company that pays its dividend in dollars. A strong dollar in a bad year can turn a real price increase into a reported decline.

The value-at-risk disclosure puts a daily figure on it. At the end of 2025 PMI's one-day value at risk on currency-sensitive instruments, at 95% confidence, was $97 million5, and the company uses about $50 billion of gross notional derivatives to hedge6. Hedging smooths the reported earnings; it cannot change the long-run translation of rupiah or rouble revenue into dollars.

The figure to watch is the currency line in PMI's guidance. A return to a drag of 40 cents or more in a year would absorb much of the growth the pricing delivers.

References
  1. ReportedThe company names its primary currency exposures as the euro, Indian rupee, Indonesian rupiah, Japanese yen, Russian ruble and Swiss franc.
    Philip Morris International Form 10-Q for the quarter ended 31 March 2026 - currency exposures. — Q1 2026 · publ. April 2026 · source ↗
  2. ReportedIts costs are partly in Swiss francs, where its executives are paid.
    Philip Morris International proxy statement (DEF 14A), 2026 - leadership, shareholders and executive pay. — 2026 · publ. 26 March 2026 · source ↗
  3. ReportedPMI's own chart puts the currency cost to adjusted earnings per share at 77 cents in 2022 and 38 cents in 2024.
    Philip Morris International CAGNY 2026 presentation slides - ROIC, volumes, blocked markets and cash flow targets. — February 2026 · publ. 18 February 2026 · source ↗
  4. ReportedIn 2026 the direction reversed: the September guidance update raised the reported earnings forecast to reflect currency only, with a benefit of 24 cents.
    Philip Morris International Barclays conference release, 8 September 2026 - 2026 EPS guidance raised for currency. — September 2026 · publ. 8 September 2026 · source ↗
  5. ReportedAt the end of 2025 PMI's one-day value at risk on currency-sensitive instruments, at 95% confidence, was $97 million, and the company uses about $50 billion of gross notional derivatives to hedge.
    Philip Morris International Form 10-K for fiscal 2025 - financial statements and notes: income statement, excise, cash flow, debt, acquisitions and impairments. — FY2025 · publ. 6 February 2026 · source ↗
  6. ReportedAt the end of 2025 PMI's one-day value at risk on currency-sensitive instruments, at 95% confidence, was $97 million, and the company uses about $50 billion of gross notional derivatives to hedge.
    Philip Morris International Form 10-K for fiscal 2025 - financial statements and notes: income statement, excise, cash flow, debt, acquisitions and impairments. — FY2025 · publ. 6 February 2026 · source ↗
Sources
Generated September 26, 2026