Analyst Lisa Lewandowski of Bank of America Securities maintained a Buy rating on Philip Morris (PM – Research Report), retaining the price target of $163.00.
Lisa Lewandowski’s rating is based on the resolution of significant litigation issues in Canada, which have been a concern for Philip Morris and its affiliate, Rothmans Benson & Hedges (RBH). The court’s approval of an amended plan to settle all tobacco-related claims against RBH and its affiliates, including Philip Morris, is a positive development. This resolution is expected to remove a longstanding overhang on the company’s stock, allowing Philip Morris to focus on its core operations and growth strategies.
Additionally, the settlement plan allows RBH to retain a substantial amount of cash, which can be transferred or distributed outside of Canada. This financial flexibility, combined with the potential for incremental cash flow and earnings per share from permitted dividend payments, strengthens Philip Morris’s financial position. Furthermore, the company’s commitment to transitioning smokers to less harmful alternatives and its strong growth profile in the staples sector support the Buy rating, as these factors are expected to drive future growth and shareholder returns.
In another report released on February 26, Barclays also maintained a Buy rating on the stock with a $175.00 price target.