Is Philip Morris stock a good buy in February 2022?

Philip Morris International Inc. (NYSE: PM) shares continue to trade in a buy zone after the company reported strong fourth-quarter results last trading week.

The company’s management expects organic revenue growth in the 2022 fiscal year, and Bank of America assigned a buy rating on Philip Morris shares.

Outlook remains positive

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Philip Morris reported fourth-quarter results on Feb. 10, 2022; total revenue has increased by 8.9% Y/Y to $8.1 billion, while the non-GAAP earnings per share were $1.35 (beats by $0.02).

Total revenue has increased above the expectations (+$350 million), and the company’s management expects the accelerating trends in the upcoming quarters.

Cigarette and heated tobacco unit shipment volume have increased by 4.2% during the quarter. It is also important to mention that revenues from smoke-free products accounted for 30.7% of total revenues.

The company’s management expects organic revenue growth in the 2022 fiscal year, while the adjusted earnings per share should be in the range of $6.57 to $6.75. Jacek Olczak, CEO of Philip Morris, added:

We enter 2022 with strong fundamentals, and we are forecasting organic top-line growth of 4% to 6% and currency-neutral adjusted diluted EPS growth of 8% to 11%, which prudently incorporate the continuing uncertainty on full IQOS device availability and the pace of the ongoing pandemic recovery.

Bank of America has a positive view of the shares of Philip Morris and reported that PM has one of the strongest growth profiles among its tobacco and staples peers.

Bank of America assigned a buy rating on Philip Morris shares with a $120 target price which implies more than 10% upside potential.

Philip Morris has a strong position in the market; the company pays an attractive dividend and improves its business for long-term growth and advantage.

The current dividend yield stands around 4.6%, Philip Morris trades at less than fifteen times TTM EBITDA, and this company could deliver substantial shareholder value for many years to come.

Technical analysis

Philip Morris shares have advanced slightly above 13% since the beginning of 2022 year, and the current price stands at $107.96.

Rising above $110 supports the continuation of the bullish trend, and the next price target could be located around $115 or even $120.

On the other side, if the price falls below support at $100, it would be a strong “sell” signal, and we have the open way to $90.

Summary

Philip Morris reported strong fourth-quarter results last trading week, and the company’s management expects organic revenue growth in the 2022 fiscal year. Bank of America has a positive view of the shares of Philip Morris and reported that PM has one of the strongest growth profiles among its tobacco and staples peers.

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