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2018: Interesting year for MOContinuing from the last post, I also think 2018 is
probably going to be the most interesting year for MO in a while,
because we're looking at multiple potentially significant stock
catalysts: 1. IQOS: a. Possible (IMO probable) FDA approval of IQOS for sale in USA. b. Possible (IMO highly probable) introduction of IQOS into retail sale in certain US markets.
c. Possible FDA approval of IQOS as a "reduced risk product".
a. could happen fairly soon. . .within a few months. c. may not happen at all, but I don't think it can unless a. does. Timing of a and/or c probably
affect timing of b. Assuming it is introduced during 2018 I wouldnt expecting any signficant short term boost to earnings from IQOS in less than a year of being on the market, but if the IQOS numbers look good, the STOCK market is probably going to like that and boost MO's price in anticipation of future sales. 2. DJT Tax reform a. Corporate tax reform boosting MO earnings per share
b. Dividend tax reform? c. International/repatriation tax reform We covered a in the last post. Increased earnings from lowered taxes should boost MO's price and probably also mean increased dividends. If this means a stock buyback, that wouldn't hurt either. Dividend tax reform is a wild card. I think the current proposal is silent on that but IF it happens, reduced dividend taxes certainly wouldn't hurt the value of dividend paying stocks. On repatriation of cash that's a proposed feature of DJT's tax plan. I don't know to what extent this directly affects MO, but I think this plus lower corporate tax rates do potentially have implications for MO divesting itself from AB/InBev beer, either by selling off its interest there or spinning off PMUSA (and or other tobacco). Again, contrary to Bonnie Hertzog's thesis, I don't think a PM/MO merger is plausible short term, but this type of tax reform (I think) might might increase chances for more corporate restructurings here. |
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Msg # | Subject | Author | Recs | Date Posted |
12073 | Re: 2018: Interesting year for MO | Korynd | 1 | 9/29/2017 12:31:55 PM |