Sell-side Consensus: PMI

Share on facebook
Share on twitter
Share on email
Share on whatsapp
Share on linkedin

Below is a summary of Philip Morris International (PMI) price targets of major financial services firms which updated or reiterated their ratings since January 2023.

2023 has been a year in which sell-side ran in circles. The year started with mega upgrades: such as, JP Morgan and Goldman Sachs going all the way from $95 to $116 and $120, respectively. After starting the year at $105, average analyst price target quickly increased in Q1 2023 and remained stable around $114 throughout Q2 and Q3 2023. A series of recent revisions brought the average target down to $103.5 (below the level at the beginning of 2023 and on the way to $100). Recall: our “PMI: Not All Roses” and “PMI – 2023 Investor Day: Preview” write-ups issued in September 2023 ahead of these price target cuts.

The unlikely winner of 2023 was the Societe Generale analyst who initiated PMI at $90 (Sell) on Jan 23, 2023 when the stock was trading above $100. On Jan 23, 2024 (precisely one year after Societe Generale), UBS downgraded PMI from Buy to Sell and reduced its price target from $105 to $86.5 (later reduced to $85 and marking the lowest sell-side price target).

Latest update: Jefferies reduced its PMI price target from $106 to $98 – just a few weeks after increasing it from $104 to $106.

Sell-side targets currently range from $85 to $117 – with four of them below $100. Based on the last closing price of $89.65, the average sell-side target for PMI implies +15% upside (- in the typical 10%-20% range for a company whose adjusted EPS is growing by “mid/high single-digit per annum”).

See our “Point of Caution” as you interpret the table below.

Apr 12, 2024Bank of America$109$108Buy
Feb 19, 2024Jefferies$106$98Buy
Feb 13, 2024Societe Generale$85.5$87.5Neutral1
Feb 12, 2024JP Morgan$115$110Buy2
Feb 9, 2024Morgan Stanley$113$104Buy2
Feb 9, 2024UBS$105$85Sell3
Nov 16, 2023Redburn$95Neutral
Oct 20, 2023Goldman Sachs$122$115Buy
Oct 20, 2023Stifel$114$108Buy
Sept 21, 2023Barclays$115$110Buy2
June 20, 2023Citigroup$109$117Buy4
Consensus$103.51S, 2N, 8B
(1) from Sell to Hold (2) Overweight (3) from Buy to Sell (4) from Neutral to Buy

Point of Caution

Sell-side work has a level of influence on investors despite the fact that

– the accuracy and knowledge attributed to the analysts tend to be over-stated

– analyst targets are frequently criticized to be reactive, rather than predictive (i.e. following the actual price progression rather than foreseeing it)

– there are serious studies claiming that companies with the most ambitious analyst targets consistently generate subpar returns

– many suspect analysts are influenced by inherent conflicts of interests and business relationships.

Nevertheless, sell-side is an integral part of the business-investing ecosystem and we cover their work for the sake of completeness. Moreover, we need to underline that following decades-long stability in operating and competitive environment, the Tobacco Industry is experiencing a perfect storm of multi-dimensional and concurrent transformation (driven by the replacement of traditional cigarettes by RRP/NGPs) – a phenomenon that makes it more difficult than ever for the sell-side analysts to grasp the business/market dynamics and establish fairly accurate financial models.

Call Request:

We will reach out to you within 24 hours to discuss your request. Please note that we only respond to requests with a valid business e-mail address
Disclaimer: The content in our Market Pulse section is/shall not be construed as investment advice. It is for informative purposes only and does not take into account the individual needs, investment objectives and specific financial circumstances. Any action taken upon the information in our Market Pulse section is strictly at the reader’s own risk. We assume no responsibility or liability for the actions taken. Moreover, we also assume no responsibility or liability for any errors or omissions in our content – which is provided on an “as is” basis with no guarantees of completeness, accuracy, usefulness or timeliness even if we only depend on the infromation sources that are believed to be accurate.

Session Request

We will reach out to you within 24 hours to discuss your request. Please note that we only respond to requests with a valid business e-mail address