PM – Market expectations are for Uniform ROA to remain flat, and management may have concerns about IQOS, down-trading, and international markets

• Phillip Morris International Inc. (PM:USA) currently trades near recent averages relative to UAFRS-based (Uniform) earnings, with a 16.8x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain flat, and management may have concerns about IQOS market share, cigarette down-trading, and international markets
  
• Specifically, management may lack confidence in their ability to continue beating their diluted EPS guidance, meet their adjusted operating margin guidance, and mitigate Marlboro share declines. In addition, they may have concerns about the coronavirus disruptions on their international markets, the sustainability of tobacco consumption recovery, and their ability to get FDA authorization for reduced-risk tobacco products. Moreover, they may lack confidence in their ability to sustain increasing reduced-risk product market share, IQOS vape efficiency improvements, and new IQOS user acquisitions