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Philip Morris International is a leading international tobacco company, with a wide range of premium, mid-price, and low-price brands, comprised of international, as well as local brands. Until the spin-off in March 2008, Philip Morris International was an operating company of Altria Group. The independent Philip Morris International sells tobacco products in international markets, while Altria maintains its operations in the U.S.
PM's cigarettes are sold in more than 180 markets, and in many of these markets, they hold the number one or number two market share position. Their portfolio of international and local brands is led by Marlboro, the world’s best-selling international cigarette, which accounted for approximately 37% of their total 2019 shipment volume. Marlboro is complemented in the premium-price category by Parliament. The other leading international cigarette brands are Bond Street, Chesterfield, L&M, Lark and Philip Morris. The company also owns a number of important local cigarette brands, such as Dji Sam Soe, Sampoerna A and Sampoerna U in Indonesia; Fortune and Jackpot in the Philippines; Belmont and Canadian Classics in Canada; and Delicados in Mexico.
In addition to the manufacture and sale of cigarettes and other tobacco products, PMI is engaged in the development and commercialization of Reduced-Risk Products (“RRPs”). RRPs is the term PMI uses to refer to products with the potential to reduce individual risk and population harm in comparison to smoking traditional cigarettes.
The four divisions of Philip Morris International consist of the following four regional segments:
Most tobacco and cigarette businesses today follow a Price-Profit First Strategy and enjoy significant room for strong net pricing and margin expansion. With declining cigarette sales, Philip Morris International's revenues and profits are maintained through higher pricing, which is a key driver of its performance.
Philip Morris International benefits from significant geographic diversification, with good exposure to emerging markets, which have high growth, and developed markets, which have higher operating margins.
PM's leading RRP brand, IQOS, is a precisely controlled device into which a specially designed heated tobacco unit is inserted and heated to generate an aerosol. The company markets its heated tobacco units under the brand names HEETS, HEETS Marlboro and HEETS FROM MARLBORO, defined collectively as HEETS, as well as Marlboro HeatSticks and Parliament HeatSticks. IQOS was first introduced in Nagoya, Japan in 2014. To date, IQOS is available for sale in key cities in 43 markets and nationwide in Japan.
The volume of tobacco products has been declining due to growing health consciousness among people about the extreme health risks of smoking. Governments have also been discouraging tobacco consumption through high excise duties and legislative controls such as bans on public smoking and strict restrictions on the advertising and marketing of tobacco products and compulsory health warnings.
Tax regimes, including excise taxes, sales taxes, and import duties, can disproportionately affect the retail price of cigarettes versus other tobacco products, or disproportionately affect the relative retail price of their cigarette brands versus cigarette brands manufactured by certain competitors. Because their portfolio is weighted toward the premium-price cigarette category, tax regimes based on sales price can place the company at a competitive disadvantage in some markets. State and local governments tax tobacco products for both revenue and public health purposes. Such excise taxes are at times as high as 30-80% of revenues for cigarettes in different countries. Regular excise tax increases or unfavorable changes in the tax structure lead to increases in cigarette prices and a fall in demand.
Governments also resort to anti-tobacco legislation and anti-smoking laws to discourage tobacco and cigarette consumption. Legislation, like that banning smoking in public places, lead to a reduction in cigarette sales. Proposed bills for disclosure in different countries and those mandating plain (generic) packaging for tobacco products (like Tobacco Plain Packaging Bill, 2011 in Australia) result in the expropriation of tobacco companies trademarks.
Significant regulatory developments will take place over the next few years in most of the markets, driven principally by the World Health Organization's Framework Convention on Tobacco Control (“FCTC”). The FCTC is the first international public health treaty on tobacco, and its objective is to establish a global agenda for tobacco regulation. The FCTC has led to increased efforts by tobacco control advocates and public health organizations to reduce the palatability and attractiveness of tobacco products to adult smokers.
Despite rising almost 64% from its March 2020 lows, Philip Morris stock (NYSE: PM) still appears to have some upside remaining. PM stock has rallied from $61 to $100 off its recent bottom as against the S&P 500 which increased close to 90% from its 2020 lows. ...More
Philip Morris stock (NYSE: PM) has rallied 34% in the last six months (126 trading days) and is currently trading at $95 per share. Despite belonging to a defensive sector (tobacco), the stock has been able to register healthy gains in the last few months with the company beating analysts’ expectations in Q1 2021 and providing an upbeat forecast for the coming quarte... ...More
Despite rising more than 45% from its March 2020 lows amidst the coronavirus pandemic, Philip Morris stock (NYSE: PM) still appears to be undervalued. PM stock has rallied from $61 to $89 off its recent bottom as against the S&P 500 which increased close to 80% from its 2020 lows. ...More
We think that Altria stock (NYSE: MO) is currently a better pick compared to Philip Morris stock (NYSE: PM). Altria stock trades at a trailing P/S multiple of about 3x, compared to around 4.4x for Philip Morris. ...More
FDA has approved Philip Morris International's (NYSE: PM) IQOS 3 system. The product is authorized by the agency for sale in the U.S. The FDA's decision follows an assessment of a premarket tobacco product application filed with the agency in March 2020. ...More
We believe Philip Morris stock (NYSE: PM) is a decent opportunity at the present time. PM trades at $77 currently and is, in fact, down 10% so far this year. It traded at a pre-Covid high of $88 in February and is 13% below that level now. PM stock has gained 28% from the low of $60 seen in March 2020, less than the S&P 500 which is up 60% from its March bottom. ...More
Philip Morris stock (NYSE: PM) increased 6.8% in the last three months and currently trades near $78 per share. The rise was mainly due to the gradual lifting of the lockdowns over recent months which has led to expectations of higher cigarette shipments as supply constraints ease. ...More
Even after being a part of a largely defensive sector, Philip Morris stock (NYSE: PM) saw an impressive rise of 30% from its March 2020 lows of this year. Despite such a healthy rise, at the current price of $78, we believe PM’s stock is still undervalued. ...More
Notwithstanding an impressive 32% recovery since the March 23 lows of this year, at the current price of $79 we believe that Philip Morris stock (NYSE: PM) has the potential to rise further. PM’s stock has increased from $60 in March to $79 currently as against the S&P 500 which clocked a 45% rise during the same period. ...More
Despite a 20% rise since the March 23 lows of this year, at the current price of about $72 per share we believe that Philip Morris stock (NYSE: PM) has more upside left. PM’s stock has rallied from $60 to $72 off the recent bottom compared to the S&P which moved 39%. ...More
Philip Morris’ stock (NYSE: PM) lost about 12% of its value in the last 3 years, with the stock price dropping from $77 at the end of 2016 to $68 as of 18th May 2020. At the same time, Philip Morris’ revenues steadily increased from $26.7 billion in 2016 to $29.8 billion in 2019. ...More
After almost a 20% decline in Philip Morris’ (NYSE: PM) stock since the beginning of this year, at the current price of $69 per share, we believe Philip Morris has a healthy upside. Why is that? The key is Philip Morris’ stock is still almost 35% lower than it was at the beginning of 2018, a little over 2 years ago. ...More
Philip Morris (NYSE: PM) saw its stock price drop by almost 20% in the last 3 years, from $109 in February 2017 to about $88 in February 2020. This fall was primarily driven by a drop in net income margin, due to higher marketing expenditure and cost of sales, along with reduction in the company’s price-to-earnings (P/E) multiple during this period. ...More
Philip Morris (NYSE: PM) is slated to release its Q4 and full-year 2019 results on February 6, 2020. Trefis details expectations from the company in an interactive dashboard, parts of which are highlighted below. ...More
Philip Morris’ (NYSE: PM) total expenses have trended steadily higher from around $67.7 billion in 2016 to about $71.5 billion in 2018. As a percentage of revenues, expenses have remained around 90% during the same period. Company's expenses are largely driven by excise taxes and cost of sales. ...More
Unlike conventional cigarettes, Philip Morris (NYSE: PM) heated tobacco products (reduced-risk products) are e-cigarettes that do not burn tobacco. IQOS, PM's flagship product under the category, is a precisely controlled device into which a specially designed heated tobacco unit is inserted and heated to generate an aerosol. ...More
Philip Morris (NYSE: PM) has been in the news lately, due to the proposed merger with its former parent Altria (NYSE: MO) and a lot of activity in the e-vapor business, with IQOS receiving FDA approval, while New York banned flavored e-cigarettes. ...More
Philip Morris International (NYSE: PM) has increased its earnings guidance for the full year 2019, after the company reported a strong Q2 2019, which was marked with higher earnings despite some pressure on volumes. ...More
Philip Morris International (NYSE: PM) is set to release its Q2 2019 financial results on July 18, 2019, followed by a conference call with analysts. The company is expected to report revenue of $7.42 billion in Q2 2019, marking a decline of about 4% compared to Q2 2018. ...More
Philip Morris International (NYSE: PM), manufacturer of cigarettes and other nicotine containing products including reduced-risk products, released its Q1 2019 financial results on April 18, 2019, followed by a conference call with analysts. The company reported revenue of $6.75 billion in Q1 2019, marking a growth of 2.1% over Q1 2018. ...More