As I wrote in my blog on valuation of Philip Morris International, tobacco stocks have gone through an era of great multiple de-rating since mid-2017. Though JUUL driven threat to cigarette volumes has subsided, the valuation multiples of the sector have still not recovered. This reinforces my view that key overhang on tobacco stocks is regulation, that is why I have preferred to stay away from companies with exposure to U.S. combustible profit pool (Altria, Imperial Brands, and BAT).
Brilliant analysis!! Thank you for this!!. I appreciate you outlining the risks for your thesis