Consumer Products

Will Vaping Catastrophe Play in to Philip Morris Earnings Thursday?

Philip Morris International Inc. (NYSE: PM) is set to report its most recent quarterly results before the markets open on Thursday. The consensus estimates are calling for $1.36 in earnings per share (EPS) and $7.67 billion in revenue. In the third quarter of last year, the company said it had $1.44 in EPS and $7.5 billion in revenue.

In the past quarter, Philip Morris and Altria announced that their merger discussions had ended and that they will no longer be pursuing a merger. These cigarette giants believed that the creation of a combined company had the potential to create incremental revenue and cost synergies, but management on both sides noted that they could not reach agreement.

Also in September, Juul appointed K.C. Crosthwaite as its CEO, to replace Kevin Burns, who had previously filled the role. Crosthwaite is stepping down from his position as senior vice president and chief strategy and growth officer of Altria in order to join JUUL.

Note that Altria had taken a 35% stake ($13 billion) in Juul, valuing it up to $35 billion at the time and making it one of the most valuable private companies in the world.

That appointment came after growing health concerns over vaping surfaced related to a few vaping-related deaths. Some states have even banned e-cigarettes, and the Trump administration has hinted that there may be a federal ban in the future.

Excluding Wednesday’s move, Philip Morris had performed more or less in line with the broad markets, with the stock up about 17% year to date. In the past 52 weeks, the stock was down closer to 5%.

A few analysts weighed in on Philip Morris ahead of the report:

  • Citigroup has a Buy rating with a $90 price target.
  • Merrill Lynch has a Buy rating and a $96 target.
  • Cowen has a Hold rating.
  • JPMorgan’s Neutral rating comes with an $86 target.
  • Credit Suisse has a Sell rating with an $80 price target.
  • Wells Fargo has a Buy rating and a $102 price target.

Shares of Philip Morris traded up about 0.5% to $78.71 on Wednesday, in a 52-week range of $64.67 to $92.74. The consensus price target is $93.47.