Investment idea: Philip Morris

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Published on July 7, 2022 2:28:23 PM ● Video Link: https://www.youtube.com/watch?v=xl4tuKdOG-M

Duration: 10:05

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- Philip Morris International Inc is a multinational tobacco company selling products in over 180 countries.
- On 9 May 2022, Phillip Morris (PM) made an offer to buy Swedish Match (SWMA) for $16.0 billion (SEK 106 per share), with the Swedish Match board of directors endorsing the deal to shareholders.
- PM’s position in the smoke-free market will be strengthened as a result of this deal, which will enhance the company’s portfolio while also providing an attractive entry into the US market.
- Using conservative assumptions, we found that PM has a potential upside of 4.5% to our estimated weighted intrinsic value of $103.2.
- However, SWMA has been trading at a premium to PM; thus, there is a potential rerating for PM to trade at a multiple closer to SWMA in the long term.
- We lower our recommendation on the counter to a hold.
- For more information about this counter, please contact your PSG Wealth adviser.