Philip Morris International
"While we must admit that we are surprised by the outperformance of PMI year-to-date (YTD) versus the overall group following its strength in 2011, we believe the momentum should continue for the year," Davenport analysts wrote in a March 26 report. "The overall tobacco group has underperformed the S&P 500 Index YTD, but PMI has clearly outperformed the tobacco group. We are raising our rating to a Buy and initiating our 12 month price target of $100, based on our new 2013 EPS of $5.90. We focus on three key reasons: consistency, a relatively benign tax environment and attractive yield."
Shares of Philip Morris hit a 52-week high Friday of $88.82. The stock's 52-week low of $60.45 was set on Oct. 4.Philip Morris' estimated price-to-earnings ratio for next year is 15.04 times; the average for tobacco companies is 12.16. For comparison, Altria (MO) and Lorillard (LO) both have lower forward P/Es of 13.07 and 13.22, respectively. Fifteen of the 22 analysts who cover Philip Morris rated it buy. Six analysts gave the stock a hold rating and one rated it sell. TheStreet Ratings gives Philip Morris a B grade with a buy rating and a $113.98 price target. The stock has risen 13.07% year to date.