Cigarette Stocks Reach 52-Week Highs: Philip Morris, Lorillard

NEW YORK (TheStreet) - Shares of cigarette companies Philip Morris International(PM) and Lorillard(LO) hit a 52-week high Thursday.

Both companies got a buy rating from TheStreet Ratings.

Philip Morris International

The company reported fourth-quarter earnings of $1.89 billion, or $1.08 a share, on Thursday, up from a year-ago equivalent profit of $1.75 billion, or 96 cents a share.

Philip Morris also forecast earnings of $5.25 to $5.35 a share for fiscal 2012, ahead of the current consensus view of $5.19 a share. In 2011, the company earned $4.85 a share.

"This is modestly ahead of our estimate, and consensus ahead of the results, and so we are upgrading and would expect consensus to do similarly," JPMorgan analysts wrote in a report Thursday. "The upgrade reflects slightly better trading (pricing rather than volumes) and a slightly greater buy back assumption ($6bn rather than $5bn), but is further testament to the resilience of the tobacco industry's profit growth potential we believe."

Shares of Philip Morris hit a 52-week high Thursday of $80.99. The stock's 52-week low of $58.50 was set one year ago.

Philip Morris has a forward price-to-earnings ratio of 13.93X; the average among tobacco companies is 11.87X. For comparison, Lorillard has a lower forward P/E of 12.99X.

Of the 20 analysts who cover the company, 13 rated Philip Morris a buy. Seven analysts gave the stock a hold rating.

TheStreet Ratings gives Philip Morris a B+ grade and has a $95.09 price target on the shares. The stock has risen 2.14% year to date.