Intrinsic value of Philip Morris International - PM

Previous Close

$115.33

  Intrinsic Value

$10.97

stock screener

  Rating & Target

str. sell

-90%

  Value-price divergence*

+1%

Previous close

$115.33

 
Intrinsic value

$10.97

 
Up/down potential

-90%

 
Rating

str. sell

 
Value-price divergence*

+1%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of PM stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 180.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -0.41
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  26,685
  27,219
  27,845
  28,560
  29,364
  30,254
  31,231
  32,294
  33,446
  34,686
  36,017
  37,441
  38,961
  40,579
  42,298
  44,123
  46,057
  48,103
  50,268
  52,555
  54,970
  57,518
  60,205
  63,037
  66,021
  69,164
  72,474
  75,957
  79,622
  83,478
  87,534
Variable operating expenses, $m
 
  16,425
  16,786
  17,199
  17,662
  18,175
  18,739
  19,352
  20,016
  20,731
  21,498
  21,587
  22,463
  23,396
  24,387
  25,439
  26,554
  27,734
  28,982
  30,301
  31,693
  33,162
  34,711
  36,344
  38,065
  39,877
  41,785
  43,793
  45,906
  48,130
  50,468
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  15,870
  16,425
  16,786
  17,199
  17,662
  18,175
  18,739
  19,352
  20,016
  20,731
  21,498
  21,587
  22,463
  23,396
  24,387
  25,439
  26,554
  27,734
  28,982
  30,301
  31,693
  33,162
  34,711
  36,344
  38,065
  39,877
  41,785
  43,793
  45,906
  48,130
  50,468
Operating income, $m
  10,815
  10,793
  11,058
  11,361
  11,702
  12,079
  12,492
  12,943
  13,430
  13,955
  14,519
  15,854
  16,498
  17,183
  17,911
  18,684
  19,502
  20,369
  21,286
  22,254
  23,277
  24,356
  25,493
  26,693
  27,956
  29,287
  30,689
  32,164
  33,716
  35,349
  37,066
EBITDA, $m
  11,558
  11,929
  12,204
  12,517
  12,870
  13,260
  13,688
  14,154
  14,659
  15,202
  15,786
  16,410
  17,076
  17,785
  18,539
  19,338
  20,186
  21,083
  22,031
  23,034
  24,092
  25,209
  26,387
  27,628
  28,936
  30,314
  31,764
  33,291
  34,897
  36,587
  38,365
Interest expense (income), $m
  1,052
  1,075
  494
  523
  556
  593
  634
  679
  728
  781
  838
  899
  965
  1,035
  1,109
  1,188
  1,272
  1,361
  1,455
  1,555
  1,660
  1,771
  1,888
  2,012
  2,142
  2,279
  2,424
  2,576
  2,736
  2,905
  3,082
Earnings before tax, $m
  9,924
  9,718
  10,564
  10,838
  11,145
  11,485
  11,858
  12,264
  12,702
  13,174
  13,681
  14,955
  15,533
  16,148
  16,802
  17,496
  18,231
  19,008
  19,831
  20,700
  21,617
  22,585
  23,605
  24,681
  25,815
  27,008
  28,265
  29,588
  30,980
  32,444
  33,984
Tax expense, $m
  2,768
  2,624
  2,852
  2,926
  3,009
  3,101
  3,202
  3,311
  3,430
  3,557
  3,694
  4,038
  4,194
  4,360
  4,537
  4,724
  4,922
  5,132
  5,354
  5,589
  5,837
  6,098
  6,373
  6,664
  6,970
  7,292
  7,632
  7,989
  8,364
  8,760
  9,176
Net income, $m
  6,967
  7,094
  7,712
  7,912
  8,136
  8,384
  8,656
  8,952
  9,273
  9,617
  9,987
  10,917
  11,339
  11,788
  12,266
  12,772
  13,308
  13,876
  14,476
  15,111
  15,780
  16,487
  17,232
  18,017
  18,845
  19,716
  20,633
  21,599
  22,615
  23,684
  24,808

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,239
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  36,851
  37,595
  38,460
  39,448
  40,558
  41,787
  43,136
  44,605
  46,196
  47,909
  49,748
  51,715
  53,813
  56,048
  58,423
  60,943
  63,614
  66,441
  69,431
  72,590
  75,925
  79,444
  83,156
  87,068
  91,190
  95,531
  100,102
  104,913
  109,975
  115,302
  120,904
Adjusted assets (=assets-cash), $m
  32,612
  37,595
  38,460
  39,448
  40,558
  41,787
  43,136
  44,605
  46,196
  47,909
  49,748
  51,715
  53,813
  56,048
  58,423
  60,943
  63,614
  66,441
  69,431
  72,590
  75,925
  79,444
  83,156
  87,068
  91,190
  95,531
  100,102
  104,913
  109,975
  115,302
  120,904
Revenue / Adjusted assets
  0.818
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
  0.724
Average production assets, $m
  8,439
  8,601
  8,799
  9,025
  9,279
  9,560
  9,869
  10,205
  10,569
  10,961
  11,381
  11,831
  12,312
  12,823
  13,366
  13,943
  14,554
  15,201
  15,885
  16,607
  17,370
  18,176
  19,025
  19,920
  20,863
  21,856
  22,902
  24,002
  25,161
  26,379
  27,661
Working capital, $m
  1,141
  109
  111
  114
  117
  121
  125
  129
  134
  139
  144
  150
  156
  162
  169
  176
  184
  192
  201
  210
  220
  230
  241
  252
  264
  277
  290
  304
  318
  334
  350
Total debt, $m
  29,067
  13,363
  14,142
  15,031
  16,030
  17,137
  18,351
  19,673
  21,104
  22,646
  24,301
  26,071
  27,960
  29,971
  32,109
  34,377
  36,781
  39,325
  42,016
  44,859
  47,860
  51,028
  54,368
  57,889
  61,599
  65,506
  69,620
  73,950
  78,506
  83,299
  88,341
Total liabilities, $m
  49,539
  33,835
  34,614
  35,503
  36,502
  37,609
  38,823
  40,145
  41,576
  43,118
  44,773
  46,543
  48,432
  50,443
  52,581
  54,849
  57,253
  59,797
  62,488
  65,331
  68,332
  71,500
  74,840
  78,361
  82,071
  85,978
  90,092
  94,422
  98,978
  103,771
  108,813
Total equity, $m
  -12,688
  3,759
  3,846
  3,945
  4,056
  4,179
  4,314
  4,461
  4,620
  4,791
  4,975
  5,171
  5,381
  5,605
  5,842
  6,094
  6,361
  6,644
  6,943
  7,259
  7,592
  7,944
  8,316
  8,707
  9,119
  9,553
  10,010
  10,491
  10,998
  11,530
  12,090
Total liabilities and equity, $m
  36,851
  37,594
  38,460
  39,448
  40,558
  41,788
  43,137
  44,606
  46,196
  47,909
  49,748
  51,714
  53,813
  56,048
  58,423
  60,943
  63,614
  66,441
  69,431
  72,590
  75,924
  79,444
  83,156
  87,068
  91,190
  95,531
  100,102
  104,913
  109,976
  115,301
  120,903
Debt-to-equity ratio
  -2.291
  3.550
  3.680
  3.810
  3.950
  4.100
  4.250
  4.410
  4.570
  4.730
  4.880
  5.040
  5.200
  5.350
  5.500
  5.640
  5.780
  5.920
  6.050
  6.180
  6.300
  6.420
  6.540
  6.650
  6.760
  6.860
  6.950
  7.050
  7.140
  7.220
  7.310
Adjusted equity ratio
  -0.499
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6,967
  7,094
  7,712
  7,912
  8,136
  8,384
  8,656
  8,952
  9,273
  9,617
  9,987
  10,917
  11,339
  11,788
  12,266
  12,772
  13,308
  13,876
  14,476
  15,111
  15,780
  16,487
  17,232
  18,017
  18,845
  19,716
  20,633
  21,599
  22,615
  23,684
  24,808
Depreciation, amort., depletion, $m
  743
  1,136
  1,145
  1,156
  1,168
  1,181
  1,196
  1,212
  1,229
  1,247
  1,267
  555
  578
  602
  628
  655
  683
  714
  746
  780
  816
  853
  893
  935
  979
  1,026
  1,075
  1,127
  1,181
  1,238
  1,299
Funds from operations, $m
  8,010
  8,230
  8,857
  9,068
  9,304
  9,566
  9,852
  10,164
  10,501
  10,864
  11,254
  11,473
  11,917
  12,390
  12,893
  13,426
  13,992
  14,590
  15,222
  15,890
  16,596
  17,340
  18,125
  18,952
  19,824
  20,742
  21,709
  22,726
  23,796
  24,922
  26,107
Change in working capital, $m
  -67
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
Cash from operations, $m
  8,077
  8,228
  8,855
  9,065
  9,301
  9,562
  9,848
  10,160
  10,497
  10,859
  11,249
  11,467
  11,911
  12,384
  12,886
  13,419
  13,984
  14,582
  15,214
  15,881
  16,586
  17,330
  18,114
  18,941
  19,812
  20,730
  21,695
  22,712
  23,782
  24,907
  26,091
Maintenance CAPEX, $m
  0
  -396
  -404
  -413
  -424
  -436
  -449
  -463
  -479
  -496
  -515
  -534
  -555
  -578
  -602
  -628
  -655
  -683
  -714
  -746
  -780
  -816
  -853
  -893
  -935
  -979
  -1,026
  -1,075
  -1,127
  -1,181
  -1,238
New CAPEX, $m
  -1,172
  -162
  -198
  -226
  -254
  -281
  -309
  -336
  -364
  -392
  -421
  -450
  -480
  -511
  -543
  -577
  -611
  -647
  -684
  -723
  -763
  -805
  -849
  -895
  -943
  -993
  -1,046
  -1,101
  -1,158
  -1,219
  -1,282
Cash from investing activities, $m
  -968
  -558
  -602
  -639
  -678
  -717
  -758
  -799
  -843
  -888
  -936
  -984
  -1,035
  -1,089
  -1,145
  -1,205
  -1,266
  -1,330
  -1,398
  -1,469
  -1,543
  -1,621
  -1,702
  -1,788
  -1,878
  -1,972
  -2,072
  -2,176
  -2,285
  -2,400
  -2,520
Free cash flow, $m
  7,109
  7,670
  8,253
  8,426
  8,623
  8,845
  9,091
  9,360
  9,654
  9,971
  10,313
  10,483
  10,876
  11,295
  11,741
  12,215
  12,718
  13,251
  13,816
  14,413
  15,043
  15,709
  16,412
  17,153
  17,934
  18,757
  19,624
  20,536
  21,497
  22,507
  23,571
Issuance/(repayment) of debt, $m
  1,131
  -15,704
  778
  890
  999
  1,107
  1,214
  1,322
  1,431
  1,542
  1,655
  1,770
  1,889
  2,011
  2,138
  2,268
  2,404
  2,544
  2,691
  2,843
  3,002
  3,167
  3,340
  3,521
  3,710
  3,907
  4,114
  4,330
  4,556
  4,793
  5,042
Issuance/(repurchase) of shares, $m
  0
  9,354
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  965
  -6,350
  778
  890
  999
  1,107
  1,214
  1,322
  1,431
  1,542
  1,655
  1,770
  1,889
  2,011
  2,138
  2,268
  2,404
  2,544
  2,691
  2,843
  3,002
  3,167
  3,340
  3,521
  3,710
  3,907
  4,114
  4,330
  4,556
  4,793
  5,042
Total cash flow (excl. dividends), $m
  7,200
  1,320
  9,031
  9,315
  9,622
  9,952
  10,305
  10,682
  11,085
  11,513
  11,968
  12,253
  12,764
  13,306
  13,878
  14,483
  15,122
  15,796
  16,507
  17,256
  18,045
  18,877
  19,752
  20,674
  21,644
  22,664
  23,737
  24,866
  26,053
  27,301
  28,613
Retained Cash Flow (-), $m
  -556
  -16,447
  -86
  -99
  -111
  -123
  -135
  -147
  -159
  -171
  -184
  -197
  -210
  -223
  -238
  -252
  -267
  -283
  -299
  -316
  -334
  -352
  -371
  -391
  -412
  -434
  -457
  -481
  -506
  -533
  -560
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -15,128
  8,945
  9,217
  9,511
  9,829
  10,170
  10,535
  10,926
  11,342
  11,784
  12,056
  12,555
  13,082
  13,641
  14,231
  14,855
  15,513
  16,208
  16,940
  17,712
  18,525
  19,381
  20,283
  21,231
  22,230
  23,280
  24,385
  25,547
  26,768
  28,052
Discount rate, %
 
  11.70
  12.29
  12.90
  13.54
  14.22
  14.93
  15.68
  16.46
  17.29
  18.15
  19.06
  20.01
  21.01
  22.06
  23.17
  24.32
  25.54
  26.82
  28.16
  29.57
  31.04
  32.60
  34.23
  35.94
  37.73
  39.62
  41.60
  43.68
  45.87
  48.16
PV of cash for distribution, $m
 
  -13,543
  7,095
  6,405
  5,722
  5,055
  4,412
  3,801
  3,228
  2,701
  2,223
  1,770
  1,407
  1,096
  837
  625
  456
  325
  225
  152
  100
  63
  39
  23
  13
  7
  4
  2
  1
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes, other tobacco products, and other nicotine-containing products. Its portfolio of brands comprises Marlboro, Merit, Parliament, Virginia S., L&M, Philip Morris, Bond Street, Chesterfield, Lark, Muratti, Next, and Red & White. The company also owns various cigarette brands, such as Dji Sam Soe, Sampoerna, and U Mild in Indonesia; Champion, Fortune, and Jackpot in the Philippines; Apollo-Soyuz and Optima in Russia; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It markets and sells its products in the European Union, Eastern Europe, the Middle East, Africa, Asia, Latin America, and Canada. Philip Morris International Inc. was incorporated in 1987 and is based in New York, New York.

FINANCIAL RATIOS  of  Philip Morris International (PM)

Valuation Ratios
P/E Ratio 25.7
Price to Sales 6.7
Price to Book -14.1
Price to Tangible Book
Price to Cash Flow 22.2
Price to Free Cash Flow 25.9
Growth Rates
Sales Growth Rate -0.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 22.1%
Cap. Spend. - 3 Yr. Gr. Rate -0.5%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity -203.7%
Total Debt to Equity -229.1%
Interest Coverage 10
Management Effectiveness
Return On Assets 21.8%
Ret/ On Assets - 3 Yr. Avg. 22.1%
Return On Total Capital 44.1%
Ret/ On T. Cap. - 3 Yr. Avg. 42.6%
Return On Equity -53.7%
Return On Equity - 3 Yr. Avg. -60.1%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 64.8%
Gross Margin - 3 Yr. Avg. 64.9%
EBITDA Margin 43.9%
EBITDA Margin - 3 Yr. Avg. 43%
Operating Margin 40.5%
Oper. Margin - 3 Yr. Avg. 39.8%
Pre-Tax Margin 37.2%
Pre-Tax Margin - 3 Yr. Avg. 36.3%
Net Profit Margin 26.1%
Net Profit Margin - 3 Yr. Avg. 25.6%
Effective Tax Rate 27.9%
Eff/ Tax Rate - 3 Yr. Avg. 28.3%
Payout Ratio 91.5%

PM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PM stock intrinsic value calculation we used $26685 million for the last fiscal year's total revenue generated by Philip Morris International. The default revenue input number comes from 2016 income statement of Philip Morris International. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our PM stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.7%, whose default value for PM is calculated based on our internal credit rating of Philip Morris International, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Philip Morris International.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of PM stock the variable cost ratio is equal to 60.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for PM stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.7% for Philip Morris International.

Corporate tax rate of 27% is the nominal tax rate for Philip Morris International. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the PM stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for PM are equal to 31.6%.

Life of production assets of 21.3 years is the average useful life of capital assets used in Philip Morris International operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for PM is equal to 0.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-12688 million for Philip Morris International - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 1560.7 million for Philip Morris International is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Philip Morris International at the current share price and the inputted number of shares is $180.0 billion.

RELATED COMPANIES Price Int.Val. Rating
MO Altria Group 63.69 41.35  sell
RAI Reynolds Ameri 65.40 43.39  sell
BTI British Americ 60.80 53.25  sell
XXII 22nd Century G 2.15 0.07  str.sell
VGR Vector Group 21.13 5.22  str.sell

COMPANY NEWS

▶ Vaping in Asia Could Save Big Tobacco   [Aug-16-17 12:00PM  TheStreet.com]
▶ Crushed by New FDA Tobacco Plan, Altria Stock Is a Buy   [Aug-10-17 08:54AM  Motley Fool]
▶ [$$] Big Tobaccos Next Big Thing? Tobacco   [12:04AM  The Wall Street Journal]
▶ [$$] Big Tobacco's Next Big Thing? Tobacco   [Aug-06-17 07:00AM  The Wall Street Journal]
▶ When Volatility Can Ruin Your Options Position   [Aug-02-17 09:59AM  TheStreet.com]
▶ 2 Top Dividend Stocks in E-Cigarettes   [08:33AM  Motley Fool]
▶ Big Tobacco Seeks Its Savior in Asia   [09:00AM  TheStreet.com]
▶ [$$] FDA Wants Nicotine in Cigarettes to Be Cut to Nonaddictive Levels   [Jul-29-17 12:07AM  The Wall Street Journal]
▶ Why Altria is Tanking   [03:31PM  Barrons.com]
▶ Breaking cigarettes in the blitz   [01:41PM  CNBC Videos]
▶ Tobacco Stocks Go Up in Smoke   [11:53AM  The Wall Street Journal]
▶ FDA Wants to Cut Cigarette Nicotine Levels   [11:08AM  Bloomberg Video]
▶ Why Philip Morriss 2Q17 Earnings Missed Analysts Estimates   [Jul-26-17 10:40AM  Market Realist]
▶ Why Philip Morriss 2Q17 Revenues Missed Analysts Estimates   [Jul-25-17 05:37PM  Market Realist]
▶ Company News for July 21, 2017   [09:51AM  Zacks]
▶ Philip Morris misses 2Q profit forecasts   [12:22AM  Associated Press]
▶ Phillip Morris Misses On Earnings, Slashes Guidance   [Jul-20-17 04:07PM  Investor's Business Daily]
▶ Philip Morris: Up In Smoke?   [02:19PM  Barrons.com]
▶ Phillip Morris Misses On Earnings, Slashes Guidance   [09:34AM  Investor's Business Daily]
▶ Whats Expected for Altrias Revenue in 2Q17   [Jul-19-17 02:05PM  Market Realist]
▶ How Altria Group Inc. Has Changed in the Past Two Years   [Jul-14-17 02:02PM  Motley Fool]
Stock chart of PM Financial statements of PM
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.