Philip Morris International Inc


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Philip Morris delivered a solid performance in the second quarter of 2021 which was driven by the continued strong growth of IQOS. This alone made up 13% of their volumes and approximately 30% of their adjusted net revenues compared to 24% in the same quarter of 2020. Besides, its Heated Tobacco Unit (HTU) shipment volumes increased over 30% and 12% compared to the same quarter of the previous year which was another positive sign. The combustible net revenues increased by 4% in the second quarter on an organic basis, reflecting a partial volume rebound compared to the weak performance in 2020 which was largely impacted by the Covid-19 pandemic. The company’s solid pricing was able to keep margins stable despite the inflationary environment and rising input costs.  The management announced a three-year share repurchase program, where the company targets $5-7 billion which is a positive sign for yield investors. It indicates the management’s confidence in continuing to generate strong cash flows. We expect the company to stabilize their cigarette category share over time, with HTU gains helping them. Philip Morris continues to be an excellent defensive play with a decent valuation and we give it a ‘Hold’ rating with a revised target price.

Our Report Structure:

⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
⦁ Disclosures

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