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Philip Morris: 6 Reasons to Buy Now -- Barron's Blog
DOW JONES & COMPANY, INC. 10:46 AM ET 9/22/2016
Symbol Last Price Change
PM 101.66 +1.01 (+1%)
QUOTES AS OF 11:04:10 AM ET 09/22/2016
Wells Fargo's Bonnie Herzog argues that there's more to Philip Morris International(PM) than just its hefty dividend, and offers six reasons to buy the stock ahead of its investor meeting at the end of the month. She explains:

Philip Morris (PM) is hosting an Investor Day in Lausanne, Switzerland on Sept 29th and 30th which we believe will be a positive catalyst for the stock. We expect Philip Morris(PM) to provide an in-depth overview of its reduced-risk platforms (RRPs) led by iQOS, potentially raising its growth targets, as well as highlighting growth drivers in its core combustible business. Given continued easing in F/X headwinds, we think management could reduce its negative $0.40/shr F/X guidance on FY16 EPS - possibly by as much as $0.05/shr - and reiterate its 10-12% F/X neutral FY16 EPS growth outlook (we are at 10.8%). We also believe Philip Morris'(PM) recent 2% dividend increase could suggest a reinstatement of its share buyback program sooner than later.

Bottom line - We continue to view Philip Morris(PM) as best-in-class and reiterate it as our top long-term tobacco stock pick given its: (1) improving underlying fundamentals, (2) iQOS opportunity, (3) easing F/X headwinds, (4) strengthening FCF position, (5) attractive dividend & eventual share buyback program, and (6) double-digit currency-neutral EPS growth reflecting greater potential for upside to earnings than downside risk. Thus, we reiterate our Outperform rating on Philip Morris(PM) and our $114-$116 valuation range.

Shares of Philip Morris(PM) have gained 1.4% to $102.05 at 10:42 a.m. today.

More at Barron's Stocks to Watch blog, http://blogs.barrons.com/stockstowatchtoday/