Argus analysts adjusted their rating for Philip Morris (NYSE:PM) to Hold from Buy, highlighting ongoing product risks faced by the company. Philip Morris, known for its cigarette and related product manufacturing, including Heated Tobacco Units (HTU), is navigating through a plethora of legal and regulatory challenges. These include smoking bans, package advertising restrictions, and comprehensive FDA regulations covering both smoke-free and combustible products.
Given the downward trend in tobacco usage, fueled by high taxes, governmental actions, societal shifts, and health concerns, the company’s share price has seen a decline, underperforming compared to benchmarks over the past one and five years. The shares have exhibited a bearish pattern since December 2022.
While open to reassessing Philip Morris for a Buy rating upon evidence of improved margins via strategic acquisitions and diversification from traditional cigarettes, the analysts maintained a long-term Buy stance, appreciating the company’s dividend growth history and its appealing yield of approximately 5.8%.