PM
Philip Morris International Inc.
$192.72
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 29.6% above fair value
You pay
$192.72
Bear
$122.44
Fair
$148.67
Bull
$174.92
Bear
$122.44
-36.5%
$7.83 × 14x P/E
Fair
$148.67
-22.9%
$7.83 × 17x P/E
Bull
$174.92
-9.2%
$7.83 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
24.6x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $195.50 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $148.67 per share.
Warnings
The company pays out 81% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $195.50 (from 25 analysts). Our estimate is 32% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples