PM
Philip Morris International Inc.
$188.04
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 25.6% above fair value
You pay
$188.04
Bear
$123.28
Fair
$149.69
Bull
$176.12
Bear
$123.28
-34.4%
$7.83 × 14x P/E
Fair
$149.69
-20.4%
$7.83 × 17x P/E
Bull
$176.12
-6.3%
$7.83 × 20x P/E
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
24.0x
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 $199.60 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $149.69 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 $199.60 (from 25 analysts). Our estimate is 33% 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