Analysts Favor ‘Buys’ ahead of Philip Morris’s Q4 Earnings



Analysts’ recommendations

Of the 20 analysts that follow Philip Morris International (PM), 50% are favoring “buy” ratings, while 35% are favoring “holds,” and 15% are favoring “sells.”

On average, analysts have set a 12-month price target of $86.41 on the stock, which represents a potential return of 14.1% from its February 1 closing price of $75.73.

Since the beginning of 2019, Cowen and Company, Goldman Sachs, and Morgan Stanley have all lowered their price targets on PM stock. Cowen and Company has cut its price target from $88 to $69, Morgan Stanley has lowered its price target from $102 to $80, and Goldman Sachs has cut its price target from $96 to $94. On February 1, Barclays initiated coverage on Philip Morris with an “underweight” rating and a price target of $65. Earlier, on December 18, Credit Suisse downgraded the stock from a “neutral” to an “underperform” and lowered its price target from $92 to $74.

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Peer comparison

Of the 17 analysts that cover Altria Group (MO), 47% are favoring “buys,” while 35% have given the stock “hold” ratings, and 18% have given it “sell” ratings. Altria Group’s average price target of $57.42 implies a 16.7% upside to its current price of $49.20.

Valuation multiple

The fall in Philip Morris stock has also lowered its valuation multiple. As of February 1, Philip Morris was trading at a forward PE multiple of 14.3x compared to its level of 16.1x before the announcement of its third-quarter results. On the same day, its peer Altria was trading at a forward PE multiple of 11.6x.

Philip Morris is currently trading at 15.1x analysts’ 2018 EPS estimate and 14.3x its 2019 EPS estimate, with its EPS expected to rise 6.4% and 5.3% in 2018 and 2019, respectively.


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