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Why Analysts Are Expecting Philip Morris’s Revenue to Rise in 2019

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Analysts’ revenue expectations

For 2019, analysts are expecting Philip Morris International (PM) to post revenue of $30.68 billion, which represents a rise of 3.6% from $29.63 billion in 2018.

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Revenue drivers

In mid-November, Philip Morris launched its next generation of IQOS devices, IQOS 3 and IQOS MULTI, globally. In the fourth-quarter earnings call, the company expressed satisfaction with customers’ response. The company had also rolled out a mid-priced HEETS brand in the latter part of 2018. The company is also planning a national roll-out of the HEETS brand.

Earlier, Philip Morris submitted two applications to the FDA. In the first application, the company seeks permission for the sale of IQOS in the US, and the second one is related to the marketing of IQOS as safer than cigarettes. On receiving the approval, Altria Group (MO) plans to market the product in the US.

Analysts’ EPS expectation

For 2019, Philip Morris’s management expects its EPS to be at $5.28 at the prevailing exchange rate as of February 7. For the same period, analysts expect the company to post adjusted EPS of $5.40, which implies growth of 5.8% from $5.10 in 2018. The EPS growth is likely to be driven by revenue growth and expansion of EBIT margin. Analysts expect Philip Morris’s EBIT margin to rise from 38.4% to 39.4% in 2019.

Next, we will look at the dividend policies of Philip Morris and Altria.

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