Philip Morris International Earnings: Revised Guidance Implies Less of a Slowdown; Still Undervalued

Philip Morris International reported first-quarter 2024 results that were again marginally ahead of our forecasts on the top line but slightly behind at the operating margin. The company raised full-year guidance for adjusted earnings growth to 9%-11%, 200 basis points higher on both ends on strong top-line growth and margin expansion. This represents a much less dramatic slowdown than what was guided a quarter ago, leading shares to rise by about 3%. We are reiterating our wide moat rating and do not expect to materially change our $103 fair value estimate.