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Will Philip Morris’s 3Q17 Earnings Beat Analysts’ Estimates?

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Part 6
Will Philip Morris’s 3Q17 Earnings Beat Analysts’ Estimates? PART 6 OF 6

Why Analysts Favor a ‘Hold’ for Philip Morris before Its 3Q17 Earnings

Target price

On October 10, 2017, analysts forecast a 12-month target price of $126.13 for Philip Morris International (PM), which represents 9.5% growth from its current stock price. Before the announcement of its 2Q17 earnings, analysts had forecast a target price of $122.41.

Why Analysts Favor a ‘Hold’ for Philip Morris before Its 3Q17 Earnings

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Despite the lower-than-expected 2Q17 earnings and lowering of its 2017 EPS (earnings per share) guidance, analysts have raised their target price for PM. The introduction of two new variants of HeatSticks in 2Q17 and growth in sales of iQOS could have motivated analysts to raise the company’s target price for the next 12 months. 

On October 10, 2017, Wells Fargo reiterated its “buy” rating while maintaining its target price of $140. On September 28, Goldman Sachs raised its target price from $133 to $135 while maintaining its “buy” rating.

Analysts ratings

Of the 19 analysts that follow Philip Morris, 47.4% are recommending a “buy,” while the remaining 52.6% are favoring a “hold.” None of the analysts are recommending a “sell.”

The current stock price of Philip Morris is lower than analysts’ target price. However, this does not mean an automatic “buy.” Investors should carefully analyze various parameters discussed in our articles before making any investment decisions.

Peers comparisons

Of the 15 analysts that follow Altria Group (MO), 53.3% recommend a “buy,” while the remaining 46.7% are recommending a “hold.” On an average, analysts expect Altria Group’s (MO) stock price to reach $72.00 in the next 12 months, which represents a return potential of 10.8%.

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