BofA’s Hartnett says concentrated U.S. stock returns are likely to persist
Investing.com - Citi has raised its price target on Philip Morris (NYSE:PM) to $200.00 from $188.00 while maintaining a Buy rating on the tobacco company’s stock. The tobacco giant, currently valued at $277 billion, has seen its shares surge over 54% in the past six months, trading near its 52-week high of $186.69.
The research firm expects Philip Morris to demonstrate impressive performance across its businesses in the second quarter, with strong ZYN volumes supported by capacity that came back online from late March.
Citi projects Q2 organic sales growth of 7% and operating income growth of 11%, which falls comfortably within the company’s guidance ranges. The firm also anticipates Q2 adjusted earnings per share of $1.86, exceeding the company’s guided range of $1.80-$1.85.
Looking ahead, Citi expects Philip Morris management to maintain its full-year organic revenue and operating income guidance ranges for now, but anticipates recent positive foreign exchange movements will prompt an upgrade to the FY25 adjusted EPS range to $7.45-$7.58 from the previous $7.36-$7.49.
Despite the strong year-to-date share price performance, Citi reiterated its Buy rating, citing ongoing near-term positive earnings momentum and increasing upside potential from multi-category expansion, including in the vape segment.
In other recent news, Philip Morris International has reaffirmed its 2025 profit forecast, projecting a full-year reported diluted earnings per share (EPS) between $7.01 and $7.14. This forecast, which includes a positive currency impact, indicates a projected currency-neutral growth of 10.5% to 12.5%. Additionally, BofA Securities has increased its price target for Philip Morris to $200, maintaining a Buy rating, following positive remarks from the company’s CFO on their smoke-free strategy. Jefferies also initiated coverage with a Buy rating and a $220 price target, highlighting the company’s leadership in heated tobacco and oral nicotine segments. Meanwhile, Stifel has reiterated its Buy rating with a $186 price target, emphasizing the importance of the European market for smoke-free growth. UBS analysts have maintained a Neutral rating, noting improvements in the U.S. market for the ZYN nicotine pouches. These developments reflect ongoing confidence in Philip Morris’s strategic direction and growth potential in smoke-free products.
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