JPMorgan dropped its rating on Philip Morris International (NYSE:PM) to Neutral from Overweight due to near-term headwinds.
On the positive side, the firm noted that the tobacco giant is the global leader in both cigarettes and heated tobacco products, as well as being on track to cash in on nearly $10B of cumulative new generation products investments. On the negative side, JPMorgan analysts warned that the recent geopolitical can not be ignored.
"However, the recent tensions in Ukraine has clouded PMI’s ability to achieve its near and medium term NGP targets, with Russia and Ukraine accounting for 23% of its HTU volume. Although the MT growth algorithm remains robust (FY21-24e organic sales/EBIT/EPS CAGR of +6%/+11%/+13%) driven by the highly attractive economics of HTP and an un-stretched balance sheet provides buyback support, external factors will prove too difficult to overcome."
JPMorgan assigned a price target of $110 to Philip Morris International (PM).