While it leads the industry with IQOS, Zyn, and its entire range of smoke-free and toxic products, Philip Morris remains highly dependent on its historical business: cigarette sales still account for two-thirds of its revenues and four-fifths of its profits.

Management's objective is to bring the share of new products to 50% of consolidated sales by 2025. This ambitious projection is currently being greeted with skepticism by all analysts, but it does seem quite realistic by the end of the decade.

The result is a group that will soon dominate the developed markets - the United States, Europe and Japan - with its low-risk health products. At the same time, it will continue to grow with its cigarette business in emerging markets such as Egypt, Thailand, Turkey and Indonesia.

The subject on everyone's mind will then come up again: the separation of the two brand portfolios, with a logical spin-off of the cigarette business.

Everything comes at the right time. For the time being, Philip Morris continues to invest in the transition from one to the other, using the precious profits of its historical business for this purpose. A few months ago, the group closed the $15.7 billion acquisition of Swedish Match, whose chewing tobacco line has been very successful.

This operation is part of a long-term logic, with $5.2 billion spent on R&D over the last decade, and $2.3 billion spent on the acquisitions of Fertin and Vectura - two specialists in inhalation technologies.

As expected, the results for the first quarter of 2023 show no change in direction. There was a significant drop in operating margin - from 42.6% to 34.1% compared to the first quarter of 2022 - caused by the cost of IQOS launches and a strong dollar.

A normalization is expected from the second half of the year onwards, while full-year targets remain unchanged, with revenues up 8%-10%. In the long term, management expects sales growth to average 5%, and earnings per share growth of 9% through share buybacks.

Philip Morris should achieve $35 billion in sales by 2023. With a net margin usually between 25% and 30%, we arrive at a net income estimate of roughly $8.7 to $10.5 billion, enough to cover the $7.8 billion in dividends and leave a sizable balance for share buybacks.

At a price of $98 per share, the enterprise value - market capitalization plus net debt and long-term provisions - reaches $190 billion, which is roughly x20 the profit expected this year.

A disappointment in margins or growth over the next few quarters would probably not be welcomed by the market, especially since net debt now represents three years of earnings.