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Philip Morris Stock Tanks on Credit Suisse Downgrade

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Dec. 18 2018, Updated 2:47 p.m. ET

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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