The analyst firm lowered its price objective for the tobacco company to $87 from $91. Bank of America/Merrill Lynch also lowered its EPS estimates for Phillip Morris through 2015. The firm now expects earnings of $5.09 a share for 2014 and $5.29 a share for 2015, down from $5.17 and $5.51 a share, respectively.
The downgrade and lower numbers are due to the strength of the U.S. dollar compared to the euro and yen, according to analysts Lisa K. Lewandowski and Bryan D. Spillane. The analysts noted that while the country reports its earnings in U.S. dollars, all of it sales are outside the U.S.
TheStreet Ratings team rates PHILIP MORRIS INTERNATIONAL as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PHILIP MORRIS INTERNATIONAL (PM) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself."You can view the full analysis from the report here: PM Ratings Report