On Friday Patria raised its fair value estimate for Philip Morris CR stock to CZK 15,000 (from CZK 13,850) and downgraded its recommendation to sell from hold as the new target price implies a downside of approx. 6% to the current KB stock price.
After several favorable years of increasing revenues and earnings, PM CR's performance will be negatively affected by a series of excise-tax increases in the Czech Republic and Slovakia over 2004-07. Neither a decline in the corporate income tax rates in both countries, nor a further expected strengthening of the koruna to USD will be sufficient to offset deteriorating revenues.
Jan Hájek