Nomura Securities Downgrades Philip Morris (PM) to Neutral; Medium-Term Pressures

Nomura Securities downgraded Philip Morris (NYSE: PM) to Neutral with a price target of $70.00.

Nomura analyst, David Hayes, said, "Downgrade to Neutral on medium-term pressures. Given PMI’s premium-focused portfolio (Marlboro makes up 50% of European volumes), the company has lost market share y/y in Europe for the past four quarters. We expect volumes to come under further pressure and as a result we reduce our 2012 volume forecasts from -3.0% to -3.5%.Volumes outside of Europe are also likely to come under increasing pressure as a result of tax-driven price increases in Turkey and Russia. We reduce our FY12E adjusted EPS by c.2% (to USD 5.34) on the back of weaker expected volumes and updated FX. We assign a 10-year exit multiple of 7.6x vs. an implied one previously of 7.4x. This is based on evidence supporting global volumes and pricing and how we see PMI’s relative positioning."

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 $75.58 yesterday.

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