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General information
Philip Morris International Inc. operates as a holding company. The Company, through its subsidiaries, licensees, produces, sells, distributes, and markets a wide range of branded cigarettes and tobacco products. Philip Morris International serves customers worldwide.
  • Pretty weak financial results growth rate 5.1% (average between last period year over year growth for revenue and EBITDA), there is acceleration compared to average historical growth rates (2.6%)
  • Dividend yield for the last twelve months 6.7%
  • Free cash flow yield 6.3% (LTM)
  • Share price is 15.0% higher than minimum and 36.7% lower than maximum for the last 3 years
  • The company is undervalued by EV / LTM EBITDA multiple compared to target level (11.0x vs 13.3x)
  • Fundamental value created in LTM (estimate) 19.8%
Key Financials
Ticker: PM
Share price, USD: 70.04
Common stocks: 1 555 874 621
Dividend Yield:  6.7%
FCF Yield LTM: 6.3%
EV / LTM EBITDA: 11.0x
Last revenue growth (y/y):  -2.6%
Last growth of EBITDA (y/y):  12.8%
Historical revenue growth:  2.3%
Historical growth of EBITDA:  2.9%
Target EV / EBITDA (hist 75% percentile): 13.3x
Fundamental value created in LTM: 19.8%
EV / LTM EBITDA mutiple calculation
Market Cap ($m): 108 973
Net Debt ($m): 26 516
EV (Enterprise Value): 135 489
EBITDA LTM ($m): 12 295
EV / LTM EBITDA: 11.0x

Revenue and EBITDA

Quarterly values ($m)

Change (y/y)

Cash Flow

Free Cash Flow ($m)

Net Debt / Cash and Equivalents ($m)

Share price and dividends

Share price

Payment USD per share

Multiple and potential

EV / LTM EBITDA and 75% percentile

Potential dynamics

Value Creation

Fundamental Value Creation is calculated as ratio of value created in the last period to current market cap of the company.

The fundamental value can be created in two ways:
• cash generation in form of dividend payments or debt reduction or share buybacks
• growth of the company enterprise value through improving financial results

The growth of enterprise value in the last period is estimated as product of:
• annualized increase of EBITDA in the last reporting period year over year
• relevant EV/EBITDA multiple (average between actual EV/EBITDA for the company and average general level of 10.0x is applied)

Parameter
#
Formula
Value
    
    
            EBITDA (pre LTM Q)
(1)
3 086
            EBITDA (last Q)
(2)
3 482
            EBITDA LTM
(3)
12 295
    
    
        EBITDA LTM / last Q
(4)
(3) / (2)
3.531
    Gain of EBITDA (mln $)
(5)
( (2)-(1) ) * (4)
1 398
    
    
            EV
(6)
135 489
        Mult
(7)
(6) / (3)
11.0x
        Mult common
(8)
const
10.0x
    Mult avg
(9)
avgerage
10.5x
    
    
    Equity+
(10)
(5) * (9)
14 696
    FCF LTM
(11)
6 843
    
    
Value+
(12)
(10) + (11)
21 539
Cap
(13)
108 973
    
    
Fundamental value creation
(14)
(12) / (13)
19.8%

Potential

EBITDA LTM       12 295
 
EBITDA E       12 410
Mult aim       13.3x
 
EV E       164 927
NetDebt corr       25 972
 
Cap E       138 955
Cap       108 973
Growth potential            27.5%