Philip Morris: Strong Q4 With Progress In Key Next Gen Products
(Preview) Company Update (PM US) (Buy)
Summary
Q4 results showed a rebound from the COVID-hit prior-year quarter, with cigarette volume up year-on-year and EBIT up 8.3% organically.
PM's total volumes remained stable, and its share of cigarettes has been stabilized during 2021; volume is to be stable again in 2022.
IQOS volumes continued to grow, ILUMA has been a success in Japan and Switzerland, and VEEV gained good share in E-vapor in Italy and Czechia.
2022 outlook is for revenue growth of 4-6% and EPS growth of 8-11% excluding currency, but currency will be a 7% headwind to EPS.
With shares at $105.07, we expect a total return of 43% (10.5% annualized) by 2025 year-end. The Dividend Yield is 4.8%. Buy.
Introduction
Philip Morris International Inc. released Q4 2021 results on Thursday (February 10). Shares finished the day up 0.9%.
We initiated our Buy rating on PM in June 2019. Since then, shares have gained 51% (with dividends), including 34% since the end of 2020.
Q4 results showed our investment case to be on track, with str…