Signal Ledger LabSignal Ledger valuation · PM
Philip Morris International Inc.
What the shares are worth today on our research (management’s own targets for each business): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Jun 30, 2026.
- Business value at FY2030
- $400B
- FY2030 revenue
- $58B
- FY2030 EPS · P/E
- $10.64 · 23×
- Discount rate (WACC · equity)
- 7.65% · 8.36%
Latest quarter in this research: Q3 2026
Reported Oct 21, 2026 for the quarter to Sep 30, 2026 (company release ↗ · filing ↗). This valuation already reflects these results (researched Oct 23, 2026).
| Segment | Revenue | vs a year ago | Operating income | Margin |
|---|---|---|---|---|
| International Smoke-Free | $3.87B | +0.7% | — | — |
| International Combustibles | $6.72B | +6% | — | — |
| U.S. | $0.84B | +23% | −$34M | -4.0% |
- Net revenue 11.438B, operating income 4.866B, net earnings attributable toPMI3.313B and dilutedEPS2.12. Consolidated net earnings beforeNCI are 3.522B; reported segment net revenue sums 11.437B (1M rounding).
- Two International segments do not disclose separate operating profit: combined International OCI4.894B; U.S. OCI loss.034B. Preserve nulls for the two International profits; adjusted U.S.OCI.171B is not GAAP OCI.
- FY2026 organic revenue 5-7%, organic operating income 7-9%, tax 21.5% and capex 1.4-1.6B are reaffirmed. AdjustedEPS8.29-8.44 reflects a currency-only reduction; do not replace GAAP margins with adjustedEPS.
- September 30 cash 6.683B and combined debt 47.562B are disclosed, but complete current lease liabilities and period-end ordinary shares are not. Retain June 30 SEC balance and lease split 49.014B borrowings +.099B leases; latestBalance=null.
What each business is worth
| Business | Model | FY2030 revenue | Value today | Per share | 2030 multiple | Value from beyond FY2030 |
|---|---|---|---|---|---|---|
| International Smoke-Free | Margin | $21B | $153B | $98.38 | 20.3× EBIT | 72% |
| International Combustibles | Margin | $33B | $199B | $127.70 | 16.4× EBIT | 66% |
| U.S. | Margin | $4B | $7.7B | $4.95 | 18.7× EBIT | 70% |
| Company costsHead-office costs no segment carries, valued as one negative business | Cost line | — | −$15B | −$9.93 | — | 71% |
| All businesses | $58B | $345B | $221.11 |
From 2030 back to today
- Enterprise value at end of FY2030$400B
- Less net debt at FY2030$24B
- Equity value at FY2030$377B
- ÷ (1 + 8.36%)^4.5 years at the cost of equity$262B
- + dividends paid on the way, discounted$35B
This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 0.8%, inside our 5% tolerance.
From businesses to one share
- All businesses, valued today$345B
- − borrowings$49B
- − finance leases$0.1B
- − preferred and minority claims$1.9B
- + cash and short-term investments$6B
- ÷ diluted shares1.559B
- Signal Ledger valuation$192.21
Year by year to FY2030
| Fiscal year | Revenue | EBITDA | Capex | Free cash flow | Net debt at year end |
|---|---|---|---|---|---|
| FY2026 | $43B | $18B | $2.1B | $12B | $44B |
| FY2027 | $46B | $20B | $2.3B | $14B | $41B |
| FY2028 | $50B | $21B | $2.4B | $15B | $37B |
| FY2029 | $54B | $23B | $2.6B | $16B | $31B |
| FY2030 | $58B | $25B | $2.8B | $18B | $24B |
What must be true
- International Smoke-Free grows revenue from $14.5B in FY2026 to $20.7B in FY2030 (1.4×).
- International Combustibles grows revenue from $25.3B in FY2026 to $32.9B in FY2030 (1.3×).
- U.S. grows revenue from $3.4B in FY2026 to $4.0B in FY2030 (1.2×).
- International Smoke-Free raises its EBIT margin from 41.5% to 43.4%.
- International Combustibles raises its EBIT margin from 40.2% to 42.1%.
- U.S. raises its EBIT margin from 10.0% to 11.9%.
- The company spends $12.3B of capital expenditure through FY2030.
- Net debt peaks at $45.0B in FY2025 and stays financeable.
What the price implies
To reach $201.74 at our discount rate, Philip Morris International Inc. would need about $60.3B of FY2030 sales (growth of about 8.8% a year from FY2026) with 40.5% GAAP EBIT margin — versus $57.6B and 40.5% GAAP EBIT margin in our research.
At the research price of $201.74 (2026-10-23), the price asks more than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.
If sales and margins changed together
Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.
| FY2030 sales factor | FY2030 sales | FY2026–30 CAGR | Required FY2030 margin | Requirement |
|---|---|---|---|---|
| 1.05×At research margins | $60.3B | 8.8% | 40.5% GAAP EBIT | Within margin guardrails |
| 1.50× | $86.4B | 19.0% | 29.3% GAAP EBIT | Within margin guardrails |
| 2.00× | $115.2B | 27.9% | 22.7% GAAP EBIT | Within margin guardrails |
| 3.00× | $172.8B | 41.5% | 15.9% GAAP EBIT | Within margin guardrails |
CAGR uses $43.1B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.
- Implied discount rate
- 7.4%
- All-business FY2030 sales factor
- 1.05×
The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 7.7% WACC · 8.4% cost of equity.
FY2030 revenue would need to reach $60.3B (model: $57.6B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.
If only one business changed
Businesses with margin or capacity revenue paths, ordered by value today. Revenue and margin are separate alternatives; these requirements are not added together.
International Combustibles
- Revenue alone
- FY2030 revenue would need to reach $35.5B (model: $32.9B).
- Margin alone
FY2030 EBIT margin would need to reach 45.2% (model: 42.1%).
International Smoke-Free
- Revenue alone
- FY2030 revenue would need to reach $22.8B (model: $20.7B).
- Margin alone
FY2030 EBIT margin would need to reach 47.6% (model: 43.4%).
U.S.
- Revenue alone
- FY2030 revenue would need to reach $13.2B (model: $4B).
- Margin alone
FY2030 EBIT margin would need to reach 35.0% (model: 11.9%).
Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.
The discount rate
- Cost of equity
- 8.36%
- WACC
- 7.65%
- 10-year Treasury · model / spot
- 3.87% · 5.13%
r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 0.90 = 0.8 floor relevered for debt/equity 0.16 (§4.5 leverage rule) × 5%, rounded to 0.01% (1bp)
methodology §4.5: market-weighted WACC, not rounded
The model uses the recorded 5-year average Treasury yield. The spot yield is shown for context.
Every input, with its source
Show 26 inputs · reported, guidance and rule-based
| Input | Value | Basis | Why |
|---|---|---|---|
| Revenue FY2026International Smoke-Free | $14.5B | Reported | target (methodology §4.2), growth 3.4% pmi.com ↗ |
| Revenue FY2030International Smoke-Free | $20.7B | Guidance | hold moderate (methodology §4.2), growth 9.3% pmi.com ↗ |
| EBIT margin FY2030International Smoke-Free | 43.4% | Guidance | linear path to 43.4% by FY2030 (management target) pmi.com ↗ |
| Maintenance capexInternational Smoke-Free | 4.9% | Rule | FY2026 capex $1.4-$1.6B midpoint / modeled sales is below D&A; apply methodology capex floor at $1.996B FY2025 D&A intensity including amortization (conservative). sec.gov ↗ |
| Terminal growthInternational Smoke-Free | 3.0% | Rule | methodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026International Combustibles | $25.3B | Reported | target (methodology §4.2), growth 7.8% pmi.com ↗ |
| Revenue FY2030International Combustibles | $32.9B | Guidance | hold moderate (methodology §4.2), growth 6.8% pmi.com ↗ |
| EBIT margin FY2030International Combustibles | 42.1% | Guidance | linear path to 42.1% by FY2030 (management target) pmi.com ↗ |
| Maintenance capexInternational Combustibles | 4.9% | Rule | FY2026 capex $1.4-$1.6B midpoint / modeled sales is below D&A; apply methodology capex floor at $1.996B FY2025 D&A intensity including amortization (conservative). sec.gov ↗ |
| Terminal growthInternational Combustibles | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026U.S. | $3.4B | Rule | target (methodology §4.2), growth 4.2% pmi.com ↗ |
| Revenue FY2030U.S. | $4.0B | Guidance | hold moderate (methodology §4.2), growth 4.8% pmi.com ↗ |
| EBIT margin FY2030U.S. | 11.9% | Guidance | linear path to 11.9% by FY2030 (management target) pmi.com ↗ |
| Maintenance capexU.S. | 4.9% | Rule | FY2026 capex $1.4-$1.6B midpoint / modeled sales is below D&A; apply methodology capex floor at $1.996B FY2025 D&A intensity including amortization (conservative). sec.gov ↗ |
| Terminal growthU.S. | 3.0% | Rule | methodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗ |
| Share of revenue FY2026Company costs | 1.6% | Reported | company costs outside segment profit, cash only: FY2025 corporate expenses and other $0.652B / $40.648B; contains FX and compensation excluded from unit OCI. Deduct once, rather than using old geographic EBIT.; grows with the lines' revenue sec.gov ↗ |
| Share of revenue FY2034Company costs | 1.6% | Reported | company costs outside segment profit, cash only: FY2025 corporate expenses and other $0.652B / $40.648B; contains FX and compensation excluded from unit OCI. Deduct once, rather than using old geographic EBIT.; grows with the lines' revenue sec.gov ↗ |
| WACCDiscount rates | 7.65% | Rule | methodology §4.5: market-weighted WACC, not rounded FRED DGS10 2021-10-20..2026-10-21 |
| Cost of equityDiscount rates | 8.36% | Rule | r_f 3.87% (5-year average 10-year Treasury yield 3.87% (spot 5.13% on 2026-10-21)) + β 0.90 = 0.8 floor relevered for debt/equity 0.16 (§4.5 leverage rule) × 5%, rounded to 0.01% (1bp) 60 monthly returns vs SPY, 2021-09..2026-09 (adjusted closes) |
| Tax rateDiscount rates | 21.5% | Guidance | FY2026 effective-tax outlook around 21.5%, excluding discrete events, reaffirmed; no numerical change. sec.gov ↗ |
| Cash and short-term investmentsBalance sheet | $6.0B | Reported | cash, cash equivalents and short-term investments us-gaap:CashAndCashEquivalentsAtCarryingValue · 0001628280-26-049493 (filed 2026-07-24) |
| BorrowingsBalance sheet | $49.0B | Reported | borrowings due within a year plus long-term borrowings; finance leases already included in combined debt tags removed and deducted separately us-gaap:ShortTermBorrowings + us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent · 0001628280-26-049493 + us-gaap:LongTermDebtAndCapitalLeaseObligations · 0001628280-26-049493 |
| Finance leasesBalance sheet | $99M | Reported | finance lease liabilities (capex-like; deducted once) us-gaap:FinanceLeaseLiability · 0001628280-26-049493 (filed 2026-07-24) |
| Minority interestsBalance sheet | $1.9B | Reported | noncontrolling interests at book value us-gaap:MinorityInterest · 0001628280-26-049493 (filed 2026-07-24) |
| SharesBalance sheet | 1.559B | Reported | shares outstanding as of 2026-07-17 cover page of 10-Q 0001628280-26-049493 |
| Dividends per yearShareholders | $9.2B | Reported | Last four PAID dividends throughOctober 21 are 1.47 each=5.88. The new 1.60 quarterly dividend is payableOctober 26, so neither forward 6.40 nor declared trailing 6.01 replaces the paid trailing amount. × 1.559B shares sec.gov ↗ · sec.gov ↗ · pmi.com ↗ |
Research notes
- share-count comparison: 1.56B quarter 2026-04-01..2026-06-30 · 0001628280-26-049493; point-in-time denominator retained
- unallocated company costs: $0.7B a year (1.6% of trailing revenue), growing with the lines, valued as one negative business
- cost of equity 8.36% (β 0.90 = 0.8 floor relevered for debt/equity 0.16 (§4.5 leverage rule)), WACC 7.7%
- §4.5 leverage: D/E 0.156, net debt/EBITDA 2.55, β_lev 0.898, β 0.800 → 0.898; D $49.11B, E $314.43B, cash $6.00B, base EBITDA $16.89B
Signal Ledger research under one stated scenario — management's targets are delivered — not a forecast that they will be and not investment advice. The research desk (GPT-6.1 (Codex)) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →