There Is Now An 'attractive Entry Point' For Philip Morris Stock.

It was J.P. Morgan's JPM -0.45% report on Thursday that the tobacco company was "illuminating" the growth opportunity it faced, and that it was raising its rating on the company's shares. 

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There has been an upgrade of Philip Morris (ticker: PM) by analyst Jared Dinges to Overweight from Neutral in his latest report. The stock price has been raised to $116 from $109, according to his target price for the stock. In the early hours of Thursday morning, Philip Morris shares were up 1.7% at $96.33. 

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Dinges stated that IQOS ILUMA, a smoke-free tobacco product, "has boosted PMI's share of the Heated Tobacco market in its initial launch markets, but has been hindered by severe supply chain problems." Philip Morris believes that in 2024, earnings growth will increase as a result of the supply problems diminishing in the second half of the year while the company invests more in the U.S.

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As a result, the company announced in February that its fourth-quarter earnings were lower than expected. The company was able to surpass forecasts aided by the sale of smoke-free items and growth resulting from its acquisition of Swedish Match, a company that manufactures oral nicotine pouches, in late 2006.

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A positive outlook for the company's financial performance for 2012 was also provided by management.

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Dinges, who pointed to the first quarter as a "low point" for growth in the company, said now is an "attractive entry point" for the stock.

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He wrote in a letter to investors that as PMI crosses the threshold as a majority smoke-free company (which we anticipate to happen in 2026), we see scope for increasing its valuation multiples over the medium to long term. A potential listing of its next-generation products on the stock market and its tobacco business similarly could create incremental value for the company, he added if it pursued different stock-market listings.