Needham Initiates Coverage of Philip Morris (PM) With Buy Rating

On Thursday, Needham initiated coverage of Philip Morris International Inc. (NYSE:PM) with a Buy rating and a price target of $195.

The firm commended Philip Morris for its progress in transitioning towards a smoke-free business model and noted its established market leadership in both heated tobacco and nicotine pouches.

Needham anticipates that this leadership, combined with ongoing innovation and untapped geographical markets, will drive a sustainable high-single to low-double digit earnings growth for the company. Philip Morris has invested over $14 billion in science-based innovation since 2008 to develop smoke-free alternatives, which, while not risk-free, are considered a much better choice than smoking cigarettes. The company’s vision is for these products to eventually replace cigarettes entirely.

This pivot is driven by the understanding that millions of adult smokers are seeking less harmful, yet satisfying, alternatives. Currently, Philip Morris International Inc.’s (NYSE:PM) smoke-free products are available in 95 markets globally, and 38.6 million adults have already switched from cigarettes to these alternatives. The company’s ambition is to generate more than two-thirds of its net revenue from smoke-free business by 2030, up from 42% as of Q1 2025.

While we acknowledge the potential of PM to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than PM and that has 100x upside potential, check out our report about the cheapest AI stock.

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Disclosure: None.