Skip to Content
Morningstar
Get 14 Days Free

Philip Morris International Inc PM

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Limited Risk to Valuation as PMI's Bid for Vectura Goes to Auction

Analyst Note

| Philip Gorham, CFA, FRM |

The battle between Philip Morris International, or PMI, and private equity group Carlyle to acquire the U.K.-based respiratory drug maker Vectura (not covered) will go to a 5-day auction beginning Aug. 11. PMI's latest cash offer of 165 pence per share values Vectura at 23.5 times adjusted 2022 earnings, and 5.4 times revenue. This does not look out of whack with historical deals in the drug delivery sector, according to Pitchbook data, although PMI's commitment to allow Vectura to operate as an autonomous unit may limit near-term efficiencies, and a slightly higher bid would likely have no impact on our $108 fair value estimate for PMI. We still regard the company as being slightly undervalued, and its market multiple at the high end of the tobacco group is justified by its leadership position in cigarette alternatives.

Read Full Analysis

Company Profile

Business Description

Philip Morris International is a leading international tobacco company engaged in the manufacture and sale of cigarettes and other nicotine-containing products in markets outside the United States. Through multidisciplinary capabilities in product development, state-of-the-art facilities, and scientific substantiation, the company aims to ensure that its smoke-free products meet adult consumer preferences and rigorous regulatory requirements. Management's vision is that these products ultimately replace cigarettes.

Contact
120 Park Avenue
New York, NY, 10017
T +1 917 663-2000
Sector Consumer Defensive
Industry Tobacco
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type High Yield
Employees 71,000

Related

Investing Specialists
Our Ultimate Stock-Pickers' Top 10 Dividend-Yielding Stocks
A majority of the top 10 dividend-yielding names are undervalued.
Malik Ahmed Khan
Market Update
Dividend Stocks Are Back, Fixed Income Not So Much
The value rotation has given new life to laggard equity-income strategies.
Dan Lefkovitz
Stock Analyst Update
Rumors of Menthol, Nicotine Bans Are Risks, But Not New
We maintain our valuations and wide moat and negative trend ratings for the cigarette makers as reports have surfaced that the Biden administration is considering lowering the nicotine and menthol levels in cigarettes.
Philip Gorham
US Videos
3 Overlooked Dividend Stocks That Top Managers Like
These wide-moat firms are currently undervalued.
Morningstar
Investing Specialists
Our Ultimate Stock-Pickers' Top 10 Dividend-Yielding Stocks
A majority of the top 10 dividend-yielding names are undervalued.
Malik Ahmed Khan
Commentary
Shareholders Versus Stakeholders
Morningstar researchers debate the best way to profit and promote social good
Haywood Kelly, CFA
Fund Spy
What Top Fund Managers Are Buying and Selling
Across the board, Morningstar Medalists got defensive in the third quarter.
Jack Shannon
Investing Specialists
Michael Reckmeyer and Matthew Hand: How to Protect Downside Amid Lofty Valuations and Paltry Yields
Two Wellington Management portfolio managers discuss how they manage risk at Vanguard Wellesley Income, why they’ve taken a liking to busted growth stocks, and where they’re finding durable sources of income.
Christine Benz
Our Picks
15 High-Quality Companies With Exceptional Leadership
These wide-moat firms all earn Exemplary stewardship ratings and trade in 4- and 5-star range.
Susan Dziubinski
Commentary
The Week Ahead: Google and Disney Set to Report Earnings
Big names in pharma and biotech also report earnings, and labor data to come on Friday.
Jess Liu
US Videos
9 Top Dividend Stock Picks
We take a look at the yield-rich utilities sector, Big Tobacco, and the major integrated oil group.
Susan Dziubinski
US Videos
Dividends and Big Tobacco
The industry is facing some disruption, but core cigarette businesses continue to perform.
Philip Gorham
Premium Article
Trends in Star Ratings for U.S. Stocks
There were fewer opportunities as the third quarter ended.
Katherine Lynch
Commentary
The Week Ahead: Earnings From Johnson & Johnson, Verizon, JPMorgan
The new earnings season kicks off with names from a variety of sectors.
Jess Liu
US Videos
3 Cheap Dividend Payers From the Ultimate Stock-Pickers
These stocks have a wide or narrow economic moat and an uncertainty rating of low or medium.
The Morningstar Ultimate Stock-Pickers Team
Stock Strategist Industry Reports
Big Value in Big Tobacco
Potential vaping regulations have limited impact on our valuations.
Philip Gorham
Investing Specialists
Our Ultimate Stock-Pickers' Top 10 Dividend-Yielding Stocks
We find several actionable ideas that yield more than the S&P 500.
The Morningstar Ultimate Stock-Pickers Team
Commentary
The Week Ahead: Housing Market Data and the Fed's Rate Decision
We're expecting earnings results from Adobe as well as the Datadog IPO.
Jess Liu
Premium Article
Are These Stocks Going the Way of the Titanic?
The moats of these 14 large-cap companies may be wide, but they’re deteriorating.
Susan Dziubinski
Commentary
The Week Ahead: The Fed's Reading on the Economy
As earnings season slows down, we're watching for the Fed's Beige Book release and tariffs on Chinese goods.
Jess Liu

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.