Tobacco

Inhaler fight offers investors false moral choice

9 Aug 2021

Philip Morris International raised its 1 bln pound bid for UK pharma group Vectura, beating Carlyle’s sweetened offer. Shareholders that shun tobacco may prefer the buyout firm. But PMI has more strategic know-how and Carlyle could sell in a few years. Price should be decisive.

Bolder smoke-free goals can singe BAT discount

28 Jul 2021

The Camel maker’s first-half sales grew 8% and it’s on track to generate 5 bln pounds in revenue from products like vapes by 2025. Yet its stock trades at half rival Philip Morris International’s multiple. U.S. exposure is partly to blame, but a bigger target would help too.

Altria better off giving cash away than burning it

20 Jul 2021

The Marlboro maker agreed to sell a wine business for $1.2 bln and is sitting on $13 bln worth of shares in A-B Inbev, from a previous sale of Miller Brewing. Exiting that in October, when it can, makes sense especially given Altria’s habit of splurging at shareholders’ expense.

Cigar exit is next strike in Swedish Match revamp

20 Jul 2021

Most of the $14 bln group’s sales come from oral tobacco and nicotine pouches which are less harmful than cigarettes, giving it a rich valuation. But rivals like Philip Morris are catching up. Getting out of stogies could raise $2 bln and give its stock a brighter ethical flame.

Philip Morris takes a pricey toke in wellness push

9 Jul 2021

The tobacco giant is buying medical inhaler maker Vectura for 1 bln pounds to boost its expansion into pharmaceuticals. CEO Jacek Olczak is unlikely to make a decent return from the deal. But he has few other options to hit a goal of $1 bln in non-nicotine sales by 2025.

Big Tobacco tech offers path to partial redemption

18 Jun 2021

Philip Morris is tweaking its inhalers for medical drugs, rather than recreational ones. If non-nicotine sales hit their target, the unit could be worth $5 bln. That’s tiny against the Marlboro maker’s $156 bln price tag. As a genuine health benefit, the PR value may be greater.

Big Smoke offers Big Oil tips to avoid dodo status

9 Jun 2021

Fat dividends supported tobacco shares even as regulators focused on health risks. The outperformance of Philip Morris suggests investors like speedy pivots. Better still, hydrocarbon producers’ switch to green energy looks an easier ESG sell than tobacco substitutes.

Capital Calls: Warren Buffett’s taxes

8 Jun 2021

Concise views on global finance: A ProPublica report unveils the true tax rate of the Sage of Omaha, Jeff Bezos and other members of the uber-rich elite.

Capital Calls: Bank of America, WeWork, Kering

20 Apr 2021

Concise views on global finance: The bank’s shareholders voted against a deeper dive into its impact on racial inequality; the office landlord is taking bitcoin as payment, for now; the Gucci owner needs to run faster to catch arch-rival LVMH.

Corona Capital: Filming drama, Spanish bank

16 Dec 2020

Concise views on the pandemic’s corporate and financial fallout: Actor Tom Cruise’s outburst about social distancing may not have been scripted, but it’s on point; Spanish bank Sabadell lines up a new leader.

Corona Capital: Home Depot

17 Nov 2020

Concise views on the pandemic’s corporate and financial fallout: Home Depot will benefit as DIYers move inside.

Corona Capital: Binge-watching, Gaming

27 Oct 2020

Concise views on the pandemic’s corporate and financial fallout: Streaming viewers like to binge-watch, but they are being stingy; a fresh surge of Covid-19 cases could be a boon for gaming developers.

Corona Capital: Bankers, Virus vices, Student digs

8 Oct 2020

Concise views on the pandemic’s corporate and financial fallout: Japan’s Mizuho tries to get its employees to take it easy; smokers and gamblers struggle to kick the habit during lockdown; UK landlord Unite Group finds even student property is not immune to Covid-19.

The Exchange: PMI CEO Andre Calantzopoulos

7 Jul 2020

The boss of the $110 bln tobacco giant is on a quest to get the world to stop smoking cigarettes and switch over to heated tobacco, mainly PMI’s Iqos brand. Calantzopoulos has a lot of dedicated customers to win over, but he tells Rob Cox how governments might lend him a hand.

Chinese IPO gives vaping a second, deep puff

7 Jul 2020

Smoore International has been valued at $9 bln in a Hong Kong listing after pricing its shares at the top of a range. The issue defies a global backlash against the battery-powered devices. At 19 times forward earnings, investors have helped to prop up a smoking hot valuation.

Philip Morris shows going upmarket has a downside

21 Apr 2020

The Marlboro maker says its profit may be hit because travelers aren’t buying pricier brands in duty-free shops. That jars with the idea that peddling nicotine is recession-proof. As customers quit or die, tobacco companies rely more on trading up. That leaves them exposed.

U.S. regulators didn’t have to meddle with Altria

2 Apr 2020

The FTC is suing the Marlboro maker to undo its 35% stake in Juul claiming it eliminated competition. The $12.8 bln investment has been a disaster for Altria and highlights one of many problems from buying disruptors. The market can beat watchdogs to the punch.

Imperial Brands’ new boss can tweak two metrics

5 Feb 2020

The tobacco company has a dividend yield way over 10% and has just had to write down flavoured vape inventory. Incoming Chief Executive Stefan Bomhard needs to hire a new products whizz and give them resources to find growth. He could use his honeymoon period to cut the dividend.

Heat from Chinese e-cigarette IPO may burn

4 Feb 2020

Smoore sells battery-powered devices to the global tobacco giants. A backlash against the smokeless pastime will likely hit the company’s red-hot profitable growth. Its planned Hong Kong listing will test how much puff is left in global vaping valuations.

Altria mess runs much deeper than Juul

30 Jan 2020

The Marlboro maker is taking another $4 bln charge on its investment in the vaping company. Its stock price compared to Philip Morris International suggests its e-cigs hedge was misdirected. A merger could be one way out for the ailing business. That may be harder now.