DCF Studio

    PM · NYQ · Consumer Defensive

    Philip Morris International Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 162.84

    Market price

    USD 208.29

    Implied upside

    -21.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Current EV/EBITDA of 21.8x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 162.84-21.8%
    Exit multiple
    USD 203.33-2.4%
    Market price
    USD 208.29

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn8bn15bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 43.6bnUSD 45.7bnUSD 47.8bnUSD 49.8bnUSD 51.8bnUSD 53.7bnUSD 55.5bnUSD 57.3bnUSD 58.8bnUSD 60.3bn+3.7%
    EBITUSD 15.9bnUSD 16.6bnUSD 17.4bnUSD 18.1bnUSD 18.8bnUSD 19.5bnUSD 20.2bnUSD 20.8bnUSD 21.4bnUSD 21.9bn+3.7%
    NOPATUSD 12.5bnUSD 13.1bnUSD 13.7bnUSD 14.3bnUSD 14.9bnUSD 15.4bnUSD 16.0bnUSD 16.4bnUSD 16.9bnUSD 17.3bn+3.7%
    Add depreciation & amortisationUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.3bnUSD 2.4bnUSD 2.4bnUSD 2.5bnUSD 2.6bn+3.7%
    Less capital expenditureUSD -1.6bnUSD -1.8bnUSD -2.1bnUSD -2.3bnUSD -2.6bnUSD -2.9bnUSD -3.2bnUSD -3.5bnUSD -3.7bnUSD -4.0bn+10.7%
    Capex, % of revenue3.7%4.0%4.4%4.7%5.0%5.4%5.7%6.0%6.4%6.7%-
    Less increase in working capitalUSD -848.7mUSD -605.9mUSD -596.8mUSD -583.8mUSD -566.7mUSD -545.6mUSD -520.5mUSD -491.4mUSD -458.4mUSD -421.8m-7.5%
    Free cashflow to firmUSD 11.9bnUSD 12.6bnUSD 13.1bnUSD 13.5bnUSD 13.9bnUSD 14.3bnUSD 14.6bnUSD 14.9bnUSD 15.2bnUSD 15.4bn+2.9%
    Discount factor0.96730.90510.84680.79230.74140.69370.64900.60730.56820.5316-
    Present valueUSD 11.5bnUSD 11.4bnUSD 11.1bnUSD 10.7bnUSD 10.3bnUSD 9.9bnUSD 9.5bnUSD 9.1bnUSD 8.6bnUSD 8.2bn-
    Present Value Of The ForecastUSD 100.3bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.565Reported 0.350, pulled toward 1.0 (Blume)
    Cost of equity7.28%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 9.4x interest cover. Book interest / average debt was lower, at 3.4%.
    Market capitalisationUSD 324.6bn86.9% of capital
    Total debtUSD 48.8bn13.1% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.88%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 162.84

    66% of EV

    Forecast FCFF, final year
    USD 15.4bn
    Capex at depreciation, working capital in reinvestment
    USD 17.3bn
    Less reinvestment at g/ROIC (8.5% of NOPAT)
    USD -1.5bn
    Capitalised
    USD 15.8bn
    ROIC (reported)
    29.3%
    Terminal value, undiscounted
    USD 371.2bn
    Terminal value, discounted
    USD 197.3bn
    Enterprise value
    USD 297.7bn
    Less net debt
    USD 44.0bn
    Equity value
    USD 253.7bn

    Exit at 20.0x EBITDA

    Value per shareUSD 203.33

    72% of EV

    Terminal value, undiscounted
    USD 489.8bn
    Terminal value, discounted
    USD 260.4bn
    Enterprise value
    USD 360.8bn
    Less net debt
    USD 44.0bn
    Equity value
    USD 316.8bn

    Spread between methods: 22%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.88%245.28276.61321.34390.18509.41
    5.88%182.54198.18218.61246.30285.85
    6.88%143.19151.96162.84176.64194.66
    7.88%116.23121.50127.82135.54145.11
    8.88%96.6199.92103.80108.41113.96

    Outlined: this model. Green text: above today's price of 208.29. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year8.6%4.0%6.6%
    EBIT margin38.6%36.4%44.9%
    Discount rate-6.9%6.0%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.