PM - Embedded Expectations Analysis - 2019 08 26
Phillip Morris International Inc. (PM:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) Earnings, with a 17.8x Uniform P/E. At these levels, the market is pricing in slightly bullish expectations for the firm, but management is concerned about revenue growth, competitive pressures in Japan and Korea, and pricingSpecifically, they may be concerned about the sustainability of recent net revenue growth in their reduced-risk products (RRP), and they appear concerned about their ability to meet their investment guidance for Q3 2019. Furthermore, they may be concerned about sustaining market dominance, and they may lack confidence in their ability to access more consumers through their extensive selection of HEETS. Moreover, they may be concerned about the sustainability of recent EU growth rates, and they appear concerned about competitive pressures in Japan and Korea. Finally, management appears to be downplaying concerns for JUUL's continued expansion, and they may be concerned about the impact of VAT increases in Japan
Philip Morris International is a holding company. Through its subsidiaries, the company is a tobacco company engaged in the manufacture and sale of cigarettes, smoke-free products and associated electronic devices and accessories, and other nicotine-containing products in markets outside the United States. The company's portfolio comprises international and local brands including Marlboro, which is complemented in the premium-price category by Parliament. The company's other international cigarette brands are Bond Street, Chesterfield, L&M, Lark and Philip Morris. The company also owns various local cigarette brands, such as Dji Sam Soe, Sampoerna A and Sampoerna U in Indonesia, and Fortune and Jackpot in the Philippines.
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