Investors should buy Philip Morris International due to growth of alternative tobacco products in the next decade, according to JPMorgan.
"We believe that the disruptive and inevitable progress of Novel Nicotine Products (NNP) will improve industry fundamentals (e.g. higher profits, premiumization) while lowering regulatory pressures," JPMorgan's Alberto Rueda wrote in a note to clients Friday.
"Big tobacco companies have the assets and expertise to succeed in this new emerging segment, particularly under a strict regulatory framework. Overall, we see PM and BAT as long-term winners given their strategies to develop a wide range of products."