Why can no one
just state a simple truth and leave it at that? PMI has not struggled
"with other challenges" to its profit growth. They have had strong
consistent local currency profit growth every single year since they
were spun off from MO in 2008, with the past five years being no
different in that regard. The only significant difference in the past
five years has been negative currency, not some additional other vague
Well, after many decades of increasing, global cigarette consumption/sales (stick volume) peaked in 2012 and has actually been decreasing (albeit slowly) since then. Along those lines, PM's own stick sales volume has been trending downwards too. Ever-increasing global restriction on marketing is another challenge, perhaps related to above.
These are not necessarily insurmountable "challenges". . .as you point out, PM has been doing relatively well regardless. . .but I think they are challenges.
Given its success
in Japan, PM may have increased confidence that IQOS could be that
runaway hit in the US as well, and feel the stock market is not
adequately reflecting that in MO's share price. But here is the rub. MO
obviously now knows that IQOS could be a runaway hit in the US as well,
and can't and won't just give up its rights to sell the product here
without being adequately compensated for whatever they think they are
Yes, I basically think this is the only scenario where a PM purchase of PMUSA might make sense. . . and I don't buy it either.
One thing I will say, though. With increasing penetration into various marketplaces, I think PM is going to be getting increasing public attention over the next year. PMUSA/MO would too, if it does introduce this product into the marketplace.