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Valuation Goldman Sachs.... PM - Our $110 12-month price target on PM is based on equal-weighted EV/EBITDA multiple of 12.3x and P/E multiple of 16.3x both on our FY22 estimates. Downside risks to our estimates & price target include headwinds from COVID-19/Global recession to the extent it dampens purchasing power & travel/consumption in the Duty Free channel, execution risk on the expansion of iQOS, supply chain disruptions, unfavorable outcomes on litigation or a significant increase in new cases, more stringent tobacco regulation, and significant increases in cigarette-related taxes. MO - Our $47 12-month price target on MO is based on an FY22E P/E multiple of 9.3x (weighted 42.5%), an FY22E EV/EBITDA multiple of 7.5x (weighted 42.5%) and an FY22E M&A EV/EBITDA multiple of 10.0x (weighted 15%). Risks include: Cigarette smoking rises/decreases, ABI performance improves/deteriorates, Marlboro outperforms/underperforms, multiple federal investigations pending, iQOS and on! fail / succeed to take off in the U.S., supply chain risk and ESG risk. |
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