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Philip Morris International Inc. (PM)
Intrinsic Value (DCF)
Current$172.56
→
Intrinsic$108.96
-37%
$64.49$108.96$197.50
Market implies 18% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $173, the market prices in continued high-teens cash flow growth (18%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $64 → Bull $197. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $139 | $154 | $171 | $188 |
| 10% | $88 | $98 | $109 | $121 |
| 12% | $61 | $68 | $76 | $85 |
| 14% | $44 | $50 | $56 | $63 |
Bull Case
- Bull case ($197) offers 14% upside at 10% growth, 8% discount
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($64) implies 63% downside at 6% growth, 12% discount
- Price reflects 18% growth expectations vs 8% historical — high bar to clear
- Trading 37% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$11.63B
Year 2$12.57B
Year 3$13.57B
Year 4$14.66B
Year 5$15.83B
Terminal$250.83B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$10.77BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.