KTCIF - Philip Morris: All Growth Drivers On Track In Q1 2021
- PM’s growth drivers remained on track in Q1, driving what we expect to be a low-teens annualized return, including a 5.1% Dividend Yield.
- Cigarette volumes were broadly stable, though reported declines were higher due to elevated shipments at the start of COVID last year.
- Margin expansion continued, powered by a combination of IQOS growth, pricing, cost savings, operational leverage, and currency.
- IQOS continued to grow in the E.U., Russia, and Japan; it now has 10%+ share in 12 markets, and is still the category leader.
- With PM shares at $94, we expect an exit price of $123 and a total return of 52% (13.0% annualized) by 2024. Buy.
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Philip Morris: All Growth Drivers On Track In Q1 2021