Advertisement
U.S. markets closed
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • Dow 30

    39,807.37
    +47.29 (+0.12%)
     
  • Nasdaq

    16,379.46
    -20.06 (-0.12%)
     
  • Russell 2000

    2,124.55
    +10.20 (+0.48%)
     
  • Crude Oil

    83.11
    -0.06 (-0.07%)
     
  • Gold

    2,254.80
    +16.40 (+0.73%)
     
  • Silver

    25.10
    +0.18 (+0.74%)
     
  • EUR/USD

    1.0778
    -0.0015 (-0.14%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • GBP/USD

    1.2619
    -0.0003 (-0.02%)
     
  • USD/JPY

    151.4200
    +0.0480 (+0.03%)
     
  • Bitcoin USD

    70,285.76
    +328.57 (+0.47%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • Nikkei 225

    40,472.00
    +303.93 (+0.76%)
     

Philip Morris Files Product Application With FDA

- By Alberto Abaterusso

Philip Morris International Inc. (PM) filed a Premarket Tobacco Product Application for its electronically heated tobacco product (EHTP) with the Food and Drug Administration 's (FDA) Center for Tobacco Products March 31, according to the Business Wire.


With this application, the tobacco giant is looking for the necessary authorization to sell the product in the U.S.

Once the U.S. worldwide cigarette and tobacco producer's requested marketing order has been granted by the FDA, Altria (MO) "would be responsible for commercializing and marketing the product in the U.S. under the terms of a licensing agreement with Philip Morris," the company says.

This will produce a positive impact on Philip Morris' revenue. The company's growth is being driven more and more by increasing adoption of its new products such as HeatSticks and iQOS. As it was for the last year when a 396 million increase in the shipment of HeatSticks' units compared to 2015 enabled the tobacco giant to counterbalance the 4.1% decline in the shipment of cigarette volumes. Therefore, Philips Morris' revenue could increase in 2016 by 1.4% to $74.953 billion from 2015.

Philip Morris closed at $112.90 per share, down 62 cents or 0.55% from the previous trading day with a volume of 3,790,727 shares traded on the New York Stock Exchange versus an average volume of 4.29 million shares traded on the stock market over the last 10 trading days and versus an average volume of 4.64 million shares traded over the last three months.

Philip Morris is uptrending and has gained 24% year to date. The price-sales (P/S) ratio is 6.65, and the forward price-earnings (P/E) ratio is 20.87. With an analysts' estimated EPS of $4.87 on average for 2017, the tobacco stock looks overvalued by the stock market at the moment. Analysts' average recommendation rating sits perfectly in the middle of a buy (2) and a hold (3) recommendation with a valuation of 2.5. The analysts' average target price per share is $113.29 which ranges between a low of $94.00 and a high of $135.00.

Analysts' average recommendation rating sits perfectly in the middle of a buy (2) and a hold (3) recommendation with a valuation of 2.5.

For the first quarter of 2017, analysts forecast that Philip Morris will generate an EPS of $1.04 on average, a 6% increase from the EPS of the comparable period of 2016, and they forecast that revenue will come in at $6.47 billion.

The tobacco giant distributes an annual dividend of $4.16 to its shareholders through quarterly payments of $1.04 per share, for a dividend yield of 3.68%.

Philip Morris closed the last quarter of 2016 with approximately $4.24 billion in cash on hand and securities and with total debt amounting to $29.07 billion. The interest coverage ratio is 10.61 versus an industry average ratio of 322.93.

Altria closed at $71.42 per share, down 63 cents or 0.87% since the previous trading day with a volume of 9,145,956 shares traded on the New York Stock Exchange versus an average volume of 7.96 million shares traded over the last 10 trading days and an average volume of 6.62 million shares traded over the last three months. The stock gained 6% year to date with a P/S ratio of 7.16 and a price-book (P/B) ratio of 10.85. The forward P/E ratio is 20.01. With an average EPS of $3.3 as forecast by analysts for 2017, Altria also looks overvalued by the stock market. Analysts see only a 2.08% upside from the current share price and set an average target price per share of $72.91. The tobacco company distributes an annual dividend of $2.44 to its shareholders, through quarterly payments of 61 cents for a dividend yield of 3.42%.

Disclosure: I have no positions in any stock mentioned in this article.

Start a free seven-day trial of Premium Membership to GuruFocus.

This article first appeared on GuruFocus.


Advertisement