Goldman Sachs Is Turning Bullish On This Tobacco Giant: Here's The Product Set To Drive Growth

Shares of Philip Morris International Inc (NYSE: PM) rose last week after Jefferies analyst Owen Bennett upgraded the stock to a Buy rating.

The company’s risk/reward could become more compelling over the next several years, as it rolls out iQOS, a line of heated tobacco products, in the U.S. market, according to Goldman Sachs.

The Philip Morris Analyst: Bonnie Herzog upgraded the rating on Philip Morris from Neutral to Buy, while raising the price target by $25 to $120.

The Philip Morris Thesis: The U.S. nicotine market increases the company’s total addressable market (TAM) by 60%, Herzog said in the upgrade note.

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The analyst added that Philip Morris could “comfortably reach a 10% share of the US combustible & heat-not-burn market by 2030,” which will “conservatively drive ~1pt of incremental annual top & bottom line growth.”

Further upside potential over the next several years could be driven by “a broader & more aggressive global rollout of ILUMA” and further price segmentation of iQOS, she further mentioned.

PM Price Action: Shares of Philip Morris had risen by 1.45% to $102.77 at the time of publication Wednesday.

Now Read: Young Adults Dumping Tobacco For Cannabis And So Are Their Parents, New Gallup Poll Finds

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