DailyPlay – Opening Trade (PM) – November 07, 2025

PM Bearish Opening Trade Signal

Investment Rationale

Investment Thesis
Philip Morris International (PM) continues to display structural weakness following its failed breakout attempts earlier this year and ongoing deterioration in momentum. The company’s premium valuation has become increasingly difficult to justify amid slowing profitability trends and mounting regulatory risks across global tobacco markets. With sentiment softening and price action confirming bearish control, PM presents an appealing opportunity for downside exposure targeting the $130 area. The risk/reward dynamic favors short-biased positioning as the stock remains under heavy technical pressure and faces limited near-term fundamental catalysts.

Technical Analysis
Philip Morris is now trading below its 20-day, 50-day, and 200-day moving averages, underscoring persistent bearish momentum. Both the 20-day and 50-day averages have recently crossed below the 200-day, forming a “death cross” pattern that reinforces the longer-term downtrend. RSI readings around 42 indicate weak but not yet oversold conditions, leaving room for additional downside without an imminent technical reversal. With the stock failing to reclaim any major moving averages, the path of least resistance remains lower, and the next key support zone lies near the $130 target area.

Fundamental Analysis
While Philip Morris maintains a leadership position in the global tobacco sector, its valuation premium over peers looks stretched given slowing profitability and ongoing regulatory challenges. Growth in smoke-free products provides some cushion, but compressed margins and limited operating leverage constrain upside potential.

• Forward PE Ratio: 17.26x vs. Industry Median 15.20x
• Expected EPS Growth: 11.56% vs. Industry Median 7.98%
• Expected Revenue Growth: 7.28% vs. Industry Median 3.74%
• Net Margins: 21.57% vs. Industry Median 32.47%

Options Trade
A defined-risk bearish strategy such as a call credit spread offers an efficient way to express a downside view. The proposed trade is to sell the Dec 19, 2025 $150 call and buy the $160 call for a net credit of $3.70. This structure yields a maximum profit of $370 if PM remains below $150 at expiration, with a maximum risk of $630 if PM rises above $160. The trade benefits from time decay and continued weakness below resistance, aligning with the technical setup targeting $130 and offering a favorable risk/reward profile for bearish exposure.

PM – Daily

Trade Details

Strategy Details

Strategy: Short Call Vertical Spread

Direction: Bearish Credit Spread

Details: Sell to Open 3 PM Dec 19 $150/$160 Call Vertical Spreads @ $3.70 Credit per Contract.

Total Risk: This trade has a max risk of $1,890 (3 Contracts x $630) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $630 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bearish trade on a stock that is expected to continue lower over the duration of this trade.

1M/6M Trends: Bearish/Bearish

Relative Strength: 2/10

OptionsPlay Score: 98

Stop Loss: @ $7.40 (100% loss to value of premium)

View PM Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Thursday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View PM Trade