Philip Morris International Inc. (NYSE:PM)

Market (fair) value of PMI

The market value demonstrated an overall upward trajectory during the period from 2020 to 2024. Notably, the value increased from 171,693 million US dollars in 2020 to 199,811 million US dollars in 2021, indicating a significant rise. In 2022, the market value slightly grew to 202,694 million US dollars but experienced a decline in 2023 to 187,583 million US dollars. Subsequently, there was a marked recovery in 2024, with the market value reaching 273,082 million US dollars, the highest point in the observed period.

Invested capital

Invested capital showed fluctuation over the five-year span. Beginning at 31,958 million US dollars in 2020, it slightly decreased to 29,268 million US dollars in 2021. However, a significant increase followed in 2022 and 2023, reaching 47,466 million and 51,440 million US dollars, respectively. By 2024, invested capital decreased somewhat to 48,390 million US dollars. Overall, the trend points to an increase compared to the initial value despite the volatility.

Market value added (MVA)

The market value added reflected a pattern correlated with the market value changes, displaying high values throughout the period but with notable fluctuations. It started at 139,735 million US dollars in 2020 and rose substantially to 170,543 million US dollars in 2021. In 2022, it fell to 155,228 million US dollars and continued declining to 136,143 million US dollars in 2023. The final year, 2024, saw a strong rebound with MVA peaking at 224,692 million US dollars.

Summary

Overall, the data reveals a volatile but generally upward trend in both market value and market value added over the five years, with a notable dip in 2023 followed by significant recoveries in 2024. Invested capital similarly increased over time, although it manifested greater fluctuations. The sharp rise in market value and MVA in 2024 suggests renewed investor confidence or improved company performance during that year. The trends imply an increasing disparity between market valuation and invested capital, indicating growing value creation as represented by the rising market value added.

The financial data exhibits notable fluctuations in market value added (MVA), invested capital, and MVA spread ratio over the observed five-year period. Several trends can be discerned from these metrics:

Market value added (MVA)

The MVA shows a generally volatile pattern. It increased significantly from 139,735 million USD in 2020 to a peak of 170,543 million USD in 2021. This was followed by a decline to 155,228 million USD in 2022, and a further drop to 136,143 million USD in 2023. However, in 2024, the MVA recovered sharply to 224,692 million USD, reaching its highest level in the period under review.

Invested capital

Invested capital fluctuates less dramatically but displays an overall upward trend with variations. It started at 31,958 million USD in 2020, decreased to 29,268 million USD in 2021, then rose substantially to 47,466 million USD in 2022. It further increased moderately to 51,440 million USD in 2023 before slightly declining to 48,390 million USD in 2024.

MVA spread ratio

The MVA spread ratio, representing the efficiency of capital investment in generating market value, shows a significant variation across the years. It peaked at 582.7% in 2021, indicating highly favorable return relative to invested capital at that time. The ratio then dropped substantially to 327.03% in 2022 and declined further to 264.66% in 2023, signaling reduced efficiency. By 2024, the ratio rebounded to 464.34%, suggesting an improvement but remaining below the 2021 peak.

Overall, the analysis reveals a period of strong market value creation in 2021 followed by a contraction phase in 2022 and 2023. The substantial recovery in 2024 suggests renewed investor confidence or operational improvements. Meanwhile, invested capital increased overall, with some volatility, and the relative return on this capital as measured by the MVA spread ratio mirrors the cyclical trends observed in MVA.

Market Value Added (MVA)

The market value added shows some fluctuations over the five-year period. There is a notable increase from 139,735 million US$ in 2020 to a peak of 170,543 million US$ in 2021. This is followed by a decline through 2023, reaching 136,143 million US$. However, in 2024, the MVA rises sharply to 224,692 million US$, representing the highest value in the observed timeframe. This pattern indicates a volatile but overall growing market valuation with a significant rebound in the final year.

Net Revenues

Net revenues display a consistent upward trend throughout the period. Starting at 28,694 million US$ in 2020, revenues steadily increase each year, reaching 37,878 million US$ in 2024. The growth rate appears gradual and stable, suggesting sustained improvement in sales or service income without any significant setbacks.

MVA Margin (%)

The MVA margin mirrors the fluctuating pattern seen in market value added but with more pronounced swings. It starts at 486.98% in 2020, climbs to a peak of 543.05% in 2021, then declines sharply through 2023 to 387.06%. In 2024, the margin recovers strongly to 593.2%, the highest percentage in the series. This indicates variability in the company's market value generation relative to its revenues, with significant recovery in the final year.

Overall Insights

The financial data reveals a company experiencing periods of both growth and contraction in market valuation, despite continuous improvement in net revenues. The disconnect between the relatively steady revenue growth and the volatile market value added alongside the MVA margin suggests external market factors or shifts in investor perceptions likely influencing the company's valuation. The sharp recovery in 2024 in both MVA and MVA margin could imply renewed investor confidence or improved market conditions. The consistent revenue increase indicates operational strength, while the volatility in market-based metrics calls for attention to factors beyond pure earnings performance.