Summary

Philip Morris continues to underperform.

Despite rosy predictions, fundamentals have deteriorated further.

One key market will negatively impact results in the coming months.

Will the credit agencies soon downgrade the company?

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In my first-ever article, "Philip Morris May Cut Dividend," I said:

A reversal to the long-term average P/E ratio could cause the company's stock price to decline by 25%, which would overwhelm the dividend yield of 4%.

and concluded:

The stock's current valuation seems stretched, especially in the context of deteriorating fundamentals, short-term currency headwinds, and unfavorable long-term trends. In addition, the company may be forced to cut or suspend its dividend in order to pay down debt, invest in R&D, and catch up on capital expenditures. Investors should consider the full fundamental picture instead of being blinded by the "sacrosanct" dividend.