Elevator Pitch
The share price of Indonesia-listed cigarette manufacturer PT Gudang Garam Tbk (GGNPF) (GDNGY) [GGRM:IJ] has declined by -26% since August 2019, after the increase in the minimum price of cigarettes and excise tax on tobacco products for 2020 was announced.
Gudang Garam trades at 11.9 times consensus forward FY2020 P/E, representing a discount to its historical five-year average forward P/E of approximately 17 times. The stock also offers a consensus forward FY2020 dividend yield of 5.1%
I assign a "Neutral" rating to Gudang Garam, as downside risks might not