On Tuesday, Societe Generale (OTC:SCGLY) adjusted its stance on Philip Morris International Inc. (NYSE:NYSE:PM), shifting from a "Sell" to a "Hold" rating. The firm also increased the tobacco company's price target to $87.50, up from the previous target of $85.50.
This rating change follows Philip Morris's recent earnings release, which revealed fourth-quarter fiscal year 2023 results that did not meet the ValueAct consensus. Additionally, the company's forecast for fiscal year 2024 earnings per share (EPS) fell short of earlier consensus expectations.
"However, the group's organic sales growth (OSG) remains strong and underlying margins are expected to improve in FY24," said the analyst.
The firm also anticipates an improvement in the company's underlying margins for fiscal year 2024. This positive outlook on the company's sales and margin prospects contributed to the analyst's decision to upgrade the stock rating.
The adjustment in rating comes after a period of underperformance for Philip Morris shares. With the revised rating, Societe Generale acknowledges the potential stabilization of the stock's value and suggests that the current price more accurately reflects the company's financial outlook and performance capabilities.
InvestingPro Insights
Amidst the recent rating change by Societe Generale, Philip Morris International Inc. (NYSE:PM) presents a mix of financial stability and potential concerns to investors. With a market capitalization of $138.59 billion, the company stands as a significant player in the tobacco industry. The InvestingPro data underscores a solid profitability metric, with a gross profit margin of 63.39% over the last twelve months as of Q4 2023, indicating efficient cost management and a strong ability to generate income from sales.
InvestingPro Tips highlight Philip Morris's commitment to shareholder returns, with the company raising its dividend for 16 consecutive years and offering a high dividend yield of 5.78%. This consistency in dividend payments, coupled with an impressive gross profit margin, suggests a reliable income stream for dividend-focused investors. However, it's worth noting that the company's stock is trading near its 52-week low, which could signal a potential buying opportunity for value investors or caution for those concerned about near-term price movements.
For those considering further research, Philip Morris offers a variety of additional InvestingPro Tips, which can be found at InvestingPro. Subscribers can access these tips to gain deeper insights into the company's financial health and market position. To enhance your investment research experience, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 9 more tips available on InvestingPro, investors can make more informed decisions based on a comprehensive analysis of Philip Morris.
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