Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

Philip Morris International / Equity Capital Markets

<ul><li>Despite being in a declining industry, Philip Morris set new highs in net revenues, earnings, and cash flows in the year driven by increased overall volumes as a result of strong organic growth.</li><li>The company’s organic net revenue per unit growth has demonstrated its shift in the business mix away from the core cigarettes business.</li><li>Despite continued shortages in device supplies in the second half of 2021, IQOS user growth reached an estimated 21.2 million total users.</li></ul>

Despite being in a declining industry, Philip Morris set new highs in net revenues, earnings, and cash flows in the year driven by increased overall volumes as a result of strong organic growth.The company’s organic net revenue per unit growth has demonstrated its shift in the business mix away from the core cigarettes business.Despite continued shortages in device supplies in the second half of 2021, IQOS user growth reached an estimated 21.2 million total users.

Philip Morris: Financial & Price Forecasts

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<ul>
<li>Shares of <a href="https://www.smartkarma.com/entities/tilray-inc" target="_blank" data-smartkarma-citation="entities:27402:1" rel="noopener">Tilray Inc (TLRY US)</a> hit 52-week low amid delay to pass a federal marijuana legalization bill in the U.S., falling cannabis prices and intense competition among cannabis producers.</li>
<li>Tilray’s valuation looks attractive keeping in mind upcoming (Jan-Mar 2022) marijuana legalization at the federal level in the United States and acquisition of Breckenridge Distillery and MedMen.</li>
<li>We expect <a href="https://www.smartkarma.com/entities/tilray-inc" target="_blank" data-smartkarma-citation="entities:27402:1" rel="noopener">Tilray Inc (TLRY US)</a> will report strong earnings for Q2’FY22 on January 10th next year and see interest from Big Tobacco to enter high-growth marijuana business.</li>
</ul>


Shares of Tilray Inc (TLRY US) hit 52-week low amid delay to pass a federal marijuana legalization bill in the U.S., falling cannabis prices and intense competition among cannabis producers.
Tilray’s valuation looks attractive keeping in mind upcoming (Jan-Mar 2022) marijuana legalization at the federal level in the United States and acquisition of Breckenridge Distillery and MedMen.
We expect Tilray Inc (TLRY US) will report strong earnings for Q2’FY22 on January 10th next year and see interest from Big Tobacco to enter high-growth marijuana business.


Opportunity To Secure a Strategic Investment From a Big Tobacco Company?

<ul><li>Philip Morris delivered a solid performance in the second quarter of 2021 which was driven by the continued strong growth of IQOS.</li><li>This alone made up 13% of their volumes and approximately 30% of their adjusted net revenues compared to 24% in the same quarter of 2020.</li><li>The combustible net revenues increased by 4% in the second quarter on an organic basis, reflecting a partial volume rebound compared to the weak performance in 2020 which was largely impacted by the Covid-19 pandemic.</li></ul>

Philip Morris delivered a solid performance in the second quarter of 2021 which was driven by the continued strong growth of IQOS.This alone made up 13% of their volumes and approximately 30% of their adjusted net revenues compared to 24% in the same quarter of 2020.The combustible net revenues increased by 4% in the second quarter on an organic basis, reflecting a partial volume rebound compared to the weak performance in 2020 which was largely impacted by the Covid-19 pandemic.

Philip Morris International Inc. - Investment Thesis

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>After a lengthy period of weakness which saw shares decline more than 62% to ¥1,812 per share by June 2020, <a href="https://www.smartkarma.com/entities/japan-tobacco-inc" target="_blank" data-smartkarma-citation="entities:13498:1" rel="noopener">Japan Tobacco (2914 JP)</a> seems to have turned a corner with the share price trending upwards (for a considerable period) for the first time in a 5-6 year time period.</li>
<li>JT’s valuation looks cheap and we think that there is potential for multiple expansion alongside a dividend hike and strong OP performance in the second half of the year.</li>
</ul>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/975/original/image_96854996521629110963958.png?1629110966" class="editor-image img-responsive" data-smartkarma-image-id="223975"></figure>


After a lengthy period of weakness which saw shares decline more than 62% to ¥1,812 per share by June 2020, Japan Tobacco (2914 JP) seems to have turned a corner with the share price trending upwards (for a considerable period) for the first time in a 5-6 year time period.
JT’s valuation looks cheap and we think that there is potential for multiple expansion alongside a dividend hike and strong OP performance in the second half of the year.



European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

As per <a href="https://www.reuters.com/world/uk/philip-morris-lifts-bid-uks-vectura-165-pence-per-share-2021-08-08/" target="_blank" rel="noopener">Reuters</a>, on 8 August <a href="https://www.smartkarma.com/entities/philip-morris-international" target="_blank" data-smartkarma-citation="entities:13328:1" rel="noopener">Philip Morris International (PM US)</a> raised its bid for <a href="https://www.smartkarma.com/entities/vectura-group-plc" target="_blank" data-smartkarma-citation="entities:22201:1" rel="noopener">Vectura (VEC LN)</a> to 165p/share, c. 6.5% higher than the last recommended 155p/share bid on 6 August by Murano Bidco (Carlyle).
The improved bid by Philip Morris is c. 2.5% above the TP in my last insight, and represents 17.3x EV/Fwd EBITDA. It reflects a full price, in my view. Vectura has strategic value for Philip Morris "PMI intends to operate Vectura as an autonomous business unit that will form the backbone of its inhaled therapeutics business".
My new TP is 165p, as I believe that the Board of Vectura will withdraw the recommendation issued for the last Carlyle offer and will recommend the last offer by Philip Morris, which is determined to win. On this basis, I reiterate long VEC LN. Gross spread is 0.6%, with limited downside, in my view.
Shares of Vectura may increase over the last offer by Philip Morris upon market opening on 9 August.

As per Reuters, on 8 August Philip Morris International (PM US) raised its bid for Vectura (VEC LN) to 165p/share, c. 6.5% higher than the last recommended 155p/share bid on 6 August by Murano Bidco (Carlyle).
The improved bid by Philip Morris is c. 2.5% above the TP in my last insight, and represents 17.3x EV/Fwd EBITDA. It reflects a full price, in my view. Vectura has strategic value for Philip Morris "PMI intends to operate Vectura as an autonomous business unit that will form the backbone of its inhaled therapeutics business".
My new TP is 165p, as I believe that the Board of Vectura will withdraw the recommendation issued for the last Carlyle offer and will recommend the last offer by Philip Morris, which is determined to win. On this basis, I reiterate long VEC LN. Gross spread is 0.6%, with limited downside, in my view.
Shares of Vectura may increase over the last offer by Philip Morris upon market opening on 9 August. 

United States

Philip Morris International Inc., through its subsidiaries, affiliates and their licensees, produces, sells, distributes, and markets a wide range of branded cigarettes and tobacco products in markets outside of the United States of America.  The Company's portfolio comprises both international and local brands.

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Philip Morris International (PM US)

Philip Morris: Financial & Price Forecasts

Despite being in a declining industry, Philip Morris set new highs in net revenues, earnings, and cash flows in the year driven by increased...

Baptista Research

Opportunity To Secure a Strategic Investment From a Big Tobacco Company?

We believe Tilray is a promising investment in global cannabis industry keeping in mind strong interest from Big Tobacco and upcoming marijuana...

Andrei Zakharov

Philip Morris International Inc. - Investment Thesis

Philip Morris delivered a solid performance in the second quarter of 2021 which was driven by the continued strong growth of IQOS. This alone made...

Baptista Research

Japan Tobacco: Turning a Corner

After a lengthy period of weakness which saw shares decline more than 62% by June 2020, JT seems to have turned a corner with the share price...

Oshadhi Kumarasiri

Race for Vectura Continues

New TP is 165p. I believe the Board of Vectura will withdraw the recommendation for last Carlyle offer and will recommend Philip Morris's....

Jesus Rodriguez Aguilar

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