Philip Morris: Solid Q4, Multiple Growth Drivers For 2023 Onwards
(Preview) Company Update (PM US) (Buy)
Summary
Philip Morris International Inc. finished 2022 with a solid 2022. Despite cost headwinds, Adjusted EPS grew 11.9% excluding currency and Russia/Ukraine.
Heated Tobacco Unit shipments grew 14.9% in 2022, including 40.1% in the European Union, and cigarette volumes were stable.
IQOS ILUMA has been a success; PM has broadened its Reduced Risk Products portfolio and is working on expanding in the U.S.
Philip Morris has a 19x P/E and a 5% Dividend Yield, though we expect no buybacks and only token dividend hikes until 2025.
With Philip Morris International shares at $102.02, we expect a total return of 47% (15.3% annualized) by 2025 year-end. Buy
Introduction
Philip Morris International Inc. released Q4 2022 results on Thursday (February 9). PM stock finished the day up 0.7%, and the share price remains 2.9% lower than a year ago.
We initiated our Buy rating on PM in June 2019. Since then, shares have gained 53% (including dividends), including since the end of 2020, despite the much stron…