Next-Gen Product May Help Philip Morris (PM) Tap Potential

January 11, 2013 12:43 PM EST
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Price: $93.85 +0.39%

Rating Summary:
    7 Buy, 11 Hold, 1 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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Today shares of Philip Morris International, Inc. (NYSE: PM) moved higher, in part because of an upgrade to Buy by Goldman Sachs. Besides the upgrade, Goldman also added Philip Morris International to its Conviction List.

The report was penned by Judy E. Hong and points out Philip Morris' combination of growth and yield, as well as its compelling valuation among large-cap staples. The report also makes note of what analysts called long term "call options". These including potential to crack open the Chinese market and Next Generation Products.

"Next-generation products (NGP) have paradigm-shifting potential – Reduced harm NGPs that effectively mimic the smoking experience but without health risks could provide tremendous upside," said Hong.

Hong points out that Philip Morris has a Phase I product that it is aiming to release commercially in 2016. If Philip Morris is successful in developing the product, analysts say it will help the company penetrate the elusive trillion dollar China market.

Goldman raised its price target on Philip Morris (NYSE: PM) to $103 to from $98.

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