Philip Morris: Q2 Strong on Nearly All Fronts, Still 5%+ Dividend Yield

Company Update (PM US) (Buy)

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Highlights

• IQOS and ZYN both grew volumes by strong double-digits

• Cigarette volume fell just 0.4% and pricing was up 9.4%

• 2023 Adjusted EPS is guided to grow 8.0-9.5% excluding FX

• With shares at $97.54, P/E is 18x and Dividend Yield is 5.2%

• We see 46% total return (18% p.a.) by end of 2025. Buy

Introduction

Philip Morris (“PM”) released Q2 2023 results on Thursday (July 20). PM stock has since fallen slightly (1.3%), and remain 13% below the peak reached in February 2022 just before the Russian invasion of Ukraine:

PM Share Price (Last 5 Years)

Source: Google Finance (21-Jul-23).

We have followed Tobacco stocks for over a decade and began publishing our research on PM publicly with a Buy rating in 2019. (You can read a recap of our sector views here and one of our PM investment case here.) Since our initiation, PM shares have gained 51% in 4 years, despite the reversa…