Philip Morris (PM)/Altria (MO) Synergies Could Be $600M - Citi

Citi analyst Adam Spielman reiterated a Buy rating and $110.00 price target on Philip Morris (NYSE: PM) after the company confirmed it is in talks with Altria regarding an all stock merger of equals.

The analyst stated "We are surprised that they are in talks, but given they are, we think it is now likely that a merger will go ahead. There is no anti-trust reason to stop it". "BAT says it will achieve merger synergies of about $400MM through its merger with Reynolds. Given MO is about 50% bigger than Reynolds, we suspect any PM-MO synergies would be about $600MM, or about 2.6% of combined EBIT".

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 $72.30 yesterday.

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