Putting an end to speculation, Philip Morris International (NYSE: PM) Tuesday confirmed it is in merger talks with rival tobacco company Altria Group (MO). Meanwhile, a statement issued by Altria said it is pursuing a merger deal with Philip Morris. The planned all-stock deal is currently in the discussion stage.
Earlier, there were unconfirmed reports that the companies are planning to become a single entity, which sent Philip Morris’ stock falling during Monday’s trading session. The stock closed the session down about 4%. On the other hand, Altria shares traded sharply higher early Tuesday, after closing the last session higher.
While the merger theory has been doing the rounds for a long time, Altria’s interest in smoke-free cigarette brand iQOS – developed recently by Philip Morris – gives it a new perspective.
Confirming its outperform rating on Philip Morris and reiterating the $102 price target, Wells Fargo in a research note released yesterday attributed the negative stock movement to the Altria deal.
These days, the general market sentiment has not been in favor of Philip Morris, mainly due to lack of transparency in its strategy to move away from conventional cigarettes to smokeless alternatives. Recent studies have found that most of the smoke-free tobacco products are not as safe as they are made out to be.
However, recent data show that Philip Morris’ shift to smokeless products has been well received so far. Last month, the company reported in-line revenues for the second quarter, with the only segment that recorded year-over-growth being Heated Tobacco.
Shares of Philip Morris traded down 6% during Tuesday’s early hours, after closing the previous session lower. Altria was up 8% soon after the session started.
Most Popular
CL Earnings: Key quarterly highlights from Colgate-Palmolive’s Q2 2024 financial results
Colgate-Palmolive Company (NYSE: CL) reported its second quarter 2024 earnings results today. Net sales increased 4.9% year-over-year to $5 billion. Organic sales increased 9%. Net income attributable to Colgate-Palmolive Company was $731
Key takeaways from Visa’s Q3 2024 earnings report
Credit card behemoth Visa, Inc. (NYSE: V) this week reported mixed results for the June quarter, with earnings matching expectations and sales slightly missing the view. Both numbers grew in
Southwest Airlines (LUV): A look at the airline’s performance in Q2 2024
Shares of Southwest Airlines Co. (NYSE: LUV) were up over 6% on Thursday after the company beat earnings estimates for the second quarter of 2024. The stock has gained 4%
Comments
Comments are closed.