Is Philip Morris International Inc (PM) overvalued?
On Equity Rank's model estimate, PM trades 112% above its fair value. Philip Morris International Inc (PM) last closed at $197.88; the multi-method model fair value is $93.14.
| Price | Model fair value | Price vs model |
|---|---|---|
| $197.88 | $93.14 | 113% above |
What the answer rests on
- 2 of 7 valuation methods put PM's value above its price and 5 put it below, so the methods disagree.
- To justify today's price, PM's free cash flow would need to grow about 4.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 3.1% a year.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 14% above to 271% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind PM's fair value · What prices assume · Other companies