UPDATE: Goldman Sachs Downgrades Philip Morris (PM) to Neutral

Goldman Sachs analyst Bonnie Herzog downgraded Philip Morris (NYSE: PM) from Buy to Neutral with a price target of $100.00.

The analyst comments "We are upgrading MO to Buy from Neutral, while downgrading PM to Neutral from Buy as we see a better relative risk/reward for MO in the current environment. Despite the recent move in the stocks, we view MO as an attractive investment in the current risk-off environment as investors become increasingly concerned about stagflation, placing a greater premium on U.S. based companies with strong free cash flows, high & stable margins and attractive FCF & dividend yields. However, we now see a more negative risk/reward for PM as we believe there is increased risk that mgmt will need to lower its FY22 EPS guidance (and possibly its l.t. iQOS targets) given increased: risks/uncertainty related to the situation in Russia/Ukraine (8% of PM's total revenue), headwinds from fx and potential pressure on iQOS new user acquisition rates as the semi-conductor chip shortages could now be more pronounced and prolonged given the neon gas supply issue. We raise our EPS estimates slightly for MO and our price target by 18% to $57 and lower our FY22/FY23 EPS estimates on PM by 6.6%/7.2% based on our stress test analysis and our price target by 14% to $100."

For an analyst ratings summary and ratings history on Philip Morris click here. For more ratings news on Philip Morris click here.

Shares of Philip Morris closed at $94.14 yesterday.

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