Goldman Sachs Suggests Overwriting Philip Morris International

Goldman Sachs is out with a research note this morning, where it suggests that traders sell calls on Philip Morris International PM to enhance yield on long stock. Goldman Sachs Tobacco analyst Judy Hong sees 19% upside to CL-Buy rated shares over the next 12-months. The GS options analysts view this as an attractive overwriting opportunity given (1) the analyst is bullish on near term fundamentals for PM, (2) their cross asset model highlights that volatility is significantly more expensive than credit or equity moves would suggest, and (3) shares could find a floor at current levels given dividend yields are in excess of bond yields. The analysts suggest selling the December $72.50 call for $1.91. Philip Morris International Inc. is a holding company. PMI, through its subsidiaries and affiliates and their licensees, is engaged in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States of America.