PM - Philip Morris International (PM) Is Considered a Good Investment by Brokers: Is That True? | Benzinga

The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?

Let's take a look at what these Wall Street heavyweights have to say about Philip Morris (NYSE: PM) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Philip Morris International currently has an average brokerage recommendation (NYSE: ABR) of 1.89, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 14 brokerage firms. An ABR of 1.89 approximates between Strong Buy and Buy.

Of the 14 recommendations that derive the current ABR, eight are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 57.1% and 7.1% of all recommendations.

While the ABR calls for buying Philip Morris International, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.

Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their ...

PM) Is Considered a Good Investment by Brokers: Is That True?>Full story available on Benzinga.com