Cigarette Stocks Reach 52-Week Highs: Philip Morris, Lorillard
NEW YORK (
) - Shares of cigarette companies
Philip Morris International
(PM) - Get Report
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 potentialwe 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
price target on the shares. The stock has risen 2.14% year to date.
Lorillard
The company reported fourth-quarter earnings of $295 million, or $2.20 a share, on Thursday, up from a profit of $259 million, or $1.74 a share, in the year-ago equivalent period.
Lorillard also increased its quarterly dividend by 19% to $1.55 a share.
"LO announced a 19% increase in the quarterly dividend to $1.55 from $1.30versus our estimate of $1.53, suggesting an indicated yield of 5.5% onyesterday's closing price," Bank of America Merrill Lynch analysts wrote in a report.
Shares of Lorillard hit a 52-week high of $127.68 on Thursday. The stock's 52-week low of $75.77 was set one year ago.
Lorillard has a forward P/E of 12.99X; the average for tobacco companies is 11.87X. For comparison,
Philip Morris
has a higher forward P/E of 13.93X.
Of the 12 analysts who cover the company, eight rated it a hold. Four analysts consider Lorillard to be a buy.
Lorillard gets a B- grade from
TheStreet Ratings
and a
price target. The stock has increased 7.87% year to date.
--
Written by Alexandra Zendrian in New York
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