Philip Morris Hacking Through

Philip Morris International (PM - Analyst Report) has a history of strong operating and financial performance as part of Altria (MO - Analyst Report). Management has a credible strategy of growing EPS in the range of 10% to 12% and returning a substantial portion of the company's cash flow to shareholders.

However, Philip Morris International has experienced an adverse mix shift as lower margin markets have grown faster than the company's average. In addition, the company is exposed to risks from litigation and increased smoking restrictions.

Lastly, the European Union tobacco market has remained weak. The Hold rating is maintained. Our current target price is $40.50.