As of today (2026-06-26), Philip Morris International's weighted average cost of capital is 4.6%%. Philip Morris International's ROIC % is 23.10% (calculated using TTM income statement data).
Philip Morris International generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
Philip Morris International (MEX:PM) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Philip Morris International's weighted average cost of capital is 4.6%%. Philip Morris International's ROIC % is 23.10% (calculated using TTM income statement data).
Philip Morris International generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Philip Morris International WACC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Tobacco subindustry, Philip Morris International's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Philip Morris International WACC % vs Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, Philip Morris International's WACC % distribution charts can be found below:
* The bar in red indicates where Philip Morris International's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Philip Morris International's market capitalization (E) is MXN4916334.621 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Philip Morris International's latest one-year quarterly average Book Value of Debt (D) is MXN943614.1348 Mil.
a) weight of equity = E / (E + D) = 4916334.621 / (4916334.621 + 943614.1348) = 0.839
b) weight of debt = D / (E + D) = 943614.1348 / (4916334.621 + 943614.1348) = 0.161
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.382%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Philip Morris International's beta is 0.1039.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.382% + 0.1039 * 6% = 5.0054%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Philip Morris International's interest expense (positive number) was MXN28815.386 Mil. Its total Book Value of Debt (D) is MXN943614.1348 Mil.
Cost of Debt = 28815.386 / 943614.1348 = 3.0537%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 50397.085 / 260860.168 = 19.32%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Philip Morris International (MEX:PM) has a WACC % of 4.6% as of Jun. 26, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Philip Morris International and its competitors. This is 25% below median its historical median of 6.17. Over the past decade, Philip Morris International's WACC % has ranged from 5.08 to 7.69. According to the industry distribution chart, Philip Morris International ranks #12 out of 51 companies in the Tobacco Products industry, placing it in the top 23.5%.
Is Philip Morris International's WACC % too high?
Philip Morris International's current WACC % of 4.6% is 25% below median its 10-year median of 6.17. Over the past 10 years, this metric has ranged from a low of 5.08 to a high of 7.69. The Tobacco Products industry median WACC % is 8.17. Philip Morris International's value of 4.6% is 43.7% below this industry median. Based on the distribution chart, Philip Morris International ranks #12 out of 51 companies in the Tobacco Products industry, which is in the top quartile — a strong position relative to peers. Overall, Philip Morris International has a GF Score™ of 75/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Philip Morris International's WACC % compare to MO and TPB?
According to the Tobacco Products industry distribution chart, Philip Morris International ranks #12 out of 51 companies for WACC %. This places Philip Morris International in the top 24% of its industry — outperforming the majority of peers. The industry median WACC % is 8.17. Philip Morris International's value of 4.6% is 43.7% below this benchmark. Historically, Philip Morris International's own WACC % has ranged from 5.08 to 7.69 over the past decade. While the company's 10-year median is 6.17 vs. the industry median of 8.17, Philip Morris International has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Tobacco Products company?
The median WACC % among Tobacco Products companies is 8.17, based on 51 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Philip Morris International's current WACC % of 4.6% is 43.7% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Philip Morris International and its competitors. For the Tobacco Products industry, the median WACC % is 8.17 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Philip Morris International's current WACC % is 4.6%, which is 25% below median its own 10-year median of 6.17. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Philip Morris International stock overvalued right now?
Based on GuruFocus' analysis, Philip Morris International (MEX:PM) is currently considered Modestly Overvalued. The stock's GF Value™ is MXN2,495.54, compared to a current price of MXN3,123.00 — trading 25.1% above its estimated fair value. The current WACC % is 4.6%, which is 25% below median its 10-year median of 6.17 and 43.7% below the Tobacco Products industry median of 8.17. Philip Morris International's overall GF Score™ is 75/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Philip Morris International (MEX:PM), the current WACC % is 4.6% as of Jun. 26, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Philip Morris International (MEX:PM) Overvalued in 2026?
Based on GuruFocus' analysis, Philip Morris International stock appears to be overvalued.
The current stock price of MXN3,123.00 is trading 25.1% above its estimated GF Value™ of MXN2,495.54.
GuruFocus considers Philip Morris International to be Modestly Overvalued.
Key valuation signals for MEX:PM:
WACC %: 4.6% (25% below median its 10-year median of 6.17)
GF Value™: MXN2,495.54 vs. price of MXN3,123.00 (25.1% above fair value)
Industry Position: 43.7% below the Tobacco Products median (#12 of 51)
No single metric tells the full story. See the MEX:PM stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Created from the international operations of Altria in 2008, Philip Morris International sells cigarettes and reduced-risk products, including heat sticks, vapes, and oral nicotine offerings, primarily outside of the US. With the 2023 acquisition of Swedish Match, a leading manufacturer of traditional oral tobacco products and nicotine pouches primarily in the US and Scandinavia, PMI is not only dominant in smokable products but also has the Iqos and Zyn brands, which respectively dominate heated tobacco and nicotine pouches in most markets. It also owns the Veev brand in vapes.
75GF Score
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