Philip Morris Trading forecasts and signals

Philip Morris International Inc (PMI) has announced that it has made a purchase offer to the Swedish tobacco company Swedish Match at a price of 106 Swedish kronor per share. The deal could amount to 161.2 billion Swedish kronor, or $16 billion. Quotes of Swedish Match jumped sharply on May 10 after the PMI announcement about ongoing negotiations on the acquisition of a Swedish company engaged in the production of non-smoking tobacco products: snus, chewing tobacco, as well as cigars, matches and lighters. The acquisition of Swedish Match will allow the American corporation to obtain a ready-made distribution network of alternative tobacco products. Previously, PMI was not engaged in the production of such products. Thus, the American manufacturer of the famous Marlboro cigarettes will be able to diversify its business and start developing new directions. At the moment, the companies are awaiting the decision of the regulator, as well as confirmation that other market participants will not make a more attractive offer to Swedish Match ...

Inflation warningsJens Weidmann, a member of the Governing Council of the European Central Bank, warned that inflation in the eurozone could grow faster than expected and urged not to delay the pandemic bond-buying program. Weidmann, who is also president of the German Bundesbank, said that higher inflation rates cannot be ruled out, and that he would urge to closely monitor the risk of too high inflation.Tender warPhilip Morris International is raising its bid for the British asthma drug manufacturer Vectura Group, valuing Vectura shares at about 1.02 billion pounds. So the company exceeds the competing offer made by the private investment company Carlyle Group on Friday. Philip Morris is looking for new sources of income, in addition to cigarettes, as more and more people in developed countries are quitting a very bad habit – smoking.IPO VirginVirgin Atlantic Airways is reportedly considering a public offering in London as the company prepares to rebuild its business after the pandemic. Executives are holding discussions with bankers and potential investors and may announce the company's IPO plans in the fall. The listing may come after a difficult 18 months for Virgin, when flights almost stopped around the world due to the coronavirus pandemic.VaccinationAnthony Fauci, a leading infectious diseases doctor in the United States, said he "strongly supports" accelerated vaccination of people with weakened immune systems. A third of Israel's adult population over the age of 60 has already received a revaccination, as the country is struggling to contain the surge in diseases. Meanwhile, the European Union is likely to discuss the resumption of travel restrictions for visitors from the United States next week, as the number of cases of coronavirus in America is growing again.TodayToday, Hargreaves Lansdown, PageGroup and PostNL are among the largest profit-reporting firms in Europe. The German manufacturer of the Covid vaccine BioNTech will also report its earnings. Atlanta Fed President Rafael Bostic will speak at a virtual event on the inclusive economy. From Monday, the French will be able to visit cafes and travel by train only with a" health pass " (health pass). Football star Lionel Messi may join Paris Saint-Germain after two decades in ...

The largest manufacturer of tobacco products, Philip Morris International Inc. (PM), has released a report for the second quarter of 2021. The company's revenue showed an increase of 14% y/y, to $7.59 billion, slightly short of the general market forecast. Due to cost optimization, operating profit increased by 14.6% y/y, to $3.13 billion, exceeding investors' expectations. EPS was slightly below the average estimates and amounted to $1.39, showing an increase of 11.2% y/y.The volume of supplies of tobacco products and tobacco heating systems increased by 6.1% y/y, showing a stronger increase compared to 2019-2020. In particular, for the first time in a long time, the supply of traditional tobacco products increased by 3.2% y/y, to 156.1 billion units, and the Middle East and Africa became the main regions for growth (+11.6%). However, it is worth taking into account the low base of the second quarter of 2020, during which the introduction of quarantine restrictions began.The direction of alternative smoking devices and tobacco heating systems increased by 30.2% y/y, to 24.4 billion units, primarily due to the expansion of the largest markets of presence - the EU and Eastern Europe (+64% and +33%, respectively). The number of IQOS users amounted to more than 20 million, most of whom stopped smoking traditional cigarettes. The company continues to expand in the markets of tobacco heating systems: its share increased by 1.4% in the quarter and amounted to almost 8% of the total addressable market, providing a further field for growth.Management has announced a new share repurchase program worth up to $7 billion over three years, which will begin in the third quarter of 2021. In addition, the company's management published a forecast for 2021, in which it raised expectations for key financial indicators. In particular, revenue is projected to increase by 6-7%, as well as an increase in operating profitability by 2%. Adjusted EPS for the full year is expected to increase by 12-14%, to $5.79-5.89. Due to the increasing importance of alternative smokeless devices, the company depends on global semiconductor supply chains. However, management pointed out the limited impact of the current global shortage of these spare parts for consumer devices.It is worth noting that Philip Morris is actively reducing its debt burden, as well as increasing its adjusted EBITDA margin. At the moment, the ratio of total debt to adjusted EBITDA is 2.09, whereas at the end of 2020 it reached 2.51. A similar dynamics is noted in the ratio net debt/adjusted EBITDA: 1.74 compared to 1.93 at the end of 2020.We view the Philip Morris report positively, noting strong results for the second quarter and an increase in management forecasts for 2021. Over the past six months, PM shares have generally traded better than many securities of "value" companies, adding 18%. However, we believe that the potential impact of positive factors has already been taken into account in the quotes. As a result, our target price for PM shares is ...