Philip Morris International Inc.PM
NYSE • Consumer Defensive
$160.74
P/E
22.07
PEG
1.68
FCF Yield
4.6%
Rev Growth YoY
+6.8% YoY
Gross Margin
67.1%
Health Score
6/10
D/E Ratio
80.98
Confidence
MEDIUM
Business Snapshot
Philip Morris International is one of the world's largest tobacco companies, selling cigarettes and smoke-free products (including its flagship IQOS heated tobacco device) in markets outside the United States. The company operates across both developed and emerging markets, with a growing emphasis on its reduced-risk product portfolio. At a market capitalisation of $250.07B, PM is a large-cap, blue-chip consumer defensive name.
Financial Health
Score: 6/10 PM's profitability metrics are exceptional — a gross margin of 67.1% and net margin of 27.9% reflect the pricing power and brand entrenchment typical of tobacco majors. However, the balance sheet carries significant strain: a Debt/Equity ratio of 80.98x flags extreme leverage that far exceeds typical consumer defensive norms...
Risk Assessment
- DEBT: Debt/Equity ratio of 80.98x indicates extreme financial leverage, well beyond what is typical for the consumer defensive sector, and creates meaningful vulnerability to interest rate increases or earnings shocks.
- VALUATION vs DCF: Current price of $160.74 trades at a ~15% premium to the Python DCF estimate of $139.22, suggesting limited margin of safety at this price level.
- TECHNICALS: Price is trading below both the 50-day moving average ($174.07) and the 200-day moving average ($165.61), indicating sustained near-term price weakness.
- EARNINGS CONSISTENCY: PM beat earnings estimates in only 2 of 4 recent quarters, reflecting inconsistent execution relative to market expectations.
- LIQUIDITY: A current ratio of 0.96x (below 1.0x) means current liabilities exceed current assets, indicating tight short-term liquidity.
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**Score: 6/10** PM's profitability metrics are exceptional — a gross margin of 67.1% and net margin of 27.9% reflect the pricing power and brand entrenchment typical of tobacco majors. However, the balance sheet carries significant strain: a Debt/Equity ratio of 80.98x flags extreme leverage that far exceeds typical consumer defensive norms. Partially offsetting this risk is a robust free cash flow of $11.45B, generating a healthy FCF yield of 4.6%, which provides meaningful capacity to service debt and fund dividends. ---
- **DEBT:** Debt/Equity ratio of 80.98x indicates extreme financial leverage, well beyond what is typical for the consumer defensive sector, and creates meaningful vulnerability to interest rate increases or earnings shocks. - **VALUATION vs DCF:** Current price of $160.74 trades at a ~15% premium to the Python DCF estimate of $139.22, suggesting limited margin of safety at this price level. - **TECHNICALS:** Price is trading below both the 50-day moving average ($174.07) and the 200-day moving average ($165.61), indicating sustained near-term price weakness. - **EARNINGS CONSISTENCY:** PM beat earnings estimates in only 2 of 4 recent quarters, reflecting inconsistent execution relative to market expectations. - **LIQUIDITY:** A current ratio of 0.96x (below 1.0x) means current liabilities exceed current assets, indicating tight short-term liquidity. ---
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