Philip Morris Stock Tanks on Credit Suisse Downgrade



Analysts’ rating changes

Today, Reuters reported that Credit Suisse downgraded Philip Morris International (PM) from “neutral” to “underperform” and lowered its price target to $74 from $92. The new price target represents a fall of 9.1% from the company’s December 17 closing price of $81.40.

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Other analysts’ ratings

Among the 19 analysts who follow Philip Morris, 52.6% recommend a “buy,” 36.8% recommend a “hold,” and 10.5% recommend a “sell.” On average, analysts have given the stock a price target of $93.25, which represents an upside potential of 14.6% from its closing price on December 17. Since the announcement of Philip Morris’s third-quarter earnings on October 18, Stifel has raised its price target from $93 to $97.

Peer comparison

Among the 17 analysts who cover Altria Group (MO), 58.8% recommend a “buy” while 41.2% recommend a “hold.” None of the analysts recommend a “sell.” Analysts have given the stock an average target price of $64.09, which represents a potential upside of 22.4% from its stock price of $52.35.

Stock performance

Credit Suisse’s downgrade had led Philip Morris’s stock price to fall today. The company’s stock price was trading ~5.0% lower at 12:45 PM EST.

Since the beginning of 2018, the company’s stock has declined 23.0%. The increased regulations and excise tax, fewer and fewer smokers, and rising competition in the reduced-risk products space have pressured the stock price. Peers Altria Group (MO) and British American Tobacco (BTI) have fallen 26.7% and 51.1%, respectively, this year.


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