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Philip Morris Looking To Regain Market Share In Indonesia With New Product

Philip Morris Looking To Regain Market Share In Indonesia With New Product
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CLSA maintained its Outperform rating on Philip Morris International Inc. (NYSE: PM) on long-term opportunity with its iQOS heat-not-burn platform, while Marlboro kreteks should help boost share, revenue and margin mix in Indonesia.

PMI launched Marlboro Filter Black in Indonesia this month, its first Marlboro-branded kretek cigarette. Marlboro Filter Black is priced at 20,000 rupiah/pack of 20 machine-made kreteks.

"We believe this launch is likely to help Philip Morris' market share and mix; much of its portfolio is 15-40% cheaper," analyst Michael Lavery wrote in a note.

Lavery expect to hear more on Philip Morris' global iQOS plans at its Investor Day next week, but supply constraints through first quarter 2017 could slow its expansion pace.

On the financial front, Lavery believes Philip Morris remains on track to meet its 2016 EPS guidance of $4.45 to $4.55. Excluding forex, the company sees EPS to rise about 10 to 12 percent from 2015 adjusted EPS of $4.42.

"We believe it has flexibility to manage spending levels to help achieve its earnings targets, particularly given very elevated spending levels in 2015 (especially 4Q15) and given iQOS supply constraints, which should curtail near-term launch spend," Lavery added.

Latest Ratings for PM

Aug 2017SBG SecuritiesUpgradesSellHold
Jul 2017Bank of AmericaMaintainsNeutral
May 2017PiperJaffrayInitiates Coverage OnOverweight

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Posted-In: CLSA Michael LaveryAnalyst Color Price Target Reiteration Analyst Ratings


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