What Morgan Stanley Would Ask Philip Morris Management
In a report published Monday, Morgan Stanley analysts maintained an Overweight rating on Philip Morris International Inc (NYSE: PM).
Philip Morris reported its 1Q results ahead of expectations. “Solid start to 2015 underscores our confidence n the global tobacco operating model,” the analysts mentioned.
The company maintained its previous $1.15 FY15 EPS currency headwind thereby reducing concerns related to its ability to pay dividend. “…first quarter results enhanced our confidence that PMI can achieve its full-year currency neutral outlook and clearly served to at least partially restore investors’ confidence in PM’s ability to return to its 6-8% organic OCI growth target in 2015,” the analysts added.
In the report Morgan Stanley noted the questions to be asked from the management at the MS Consumer Staples Corporate Access Days on May 5-6. These include:
- Factors that led to the company's 1Q beat and whether these are onetime in nature
- Factors the give the greatest confidence to deliver the increased 2015 constant-currency EPS outlook
- Factors that could lead to a moderation in pricing as the year progresses and which markets represent the greatest sources of uncertainty
- Factors that have been most important in driving the ongoing improvement in Europe and whether the deceleration in volume declines is solely due to improved pricing in the region
- How did the recent change in Italy’s excise tax structure compare to your expectations, and do you see the potential for a further shift in the tax structure during the coming year?
- Whether the company believes that the competitive headwinds in Japan eased sufficiently so that its innovation efforts may result in share gains in 2015
- Factors that have resulted in improved industry volume trends in Indonesia in recent quarters.
- Whether there has been any resolution in the pricing dislocation at the low end of the Australian market, and whether this could be a headwind to 2015 OCI growth
- Whether the Philippine government’s tax stamp initiative would drive an improvement in the level of undeclared volume
- Whether increase in inflation across the consumer goods landscape in Russia seems to exert pressure on discretionary spending
Other questions revolve around Marlboro 2.0, cost savings, excise taxes, iQOS, Currency hedging, Canada litigation, dividend and M&A.
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