Holiday Headlines: Moody’s LOVES Tobacco, GM Gets a Closer LOOK

Philip Morris International Inc. (NYSE:PM) and British American Tobacco (AMEX:BTI) are likely to gain from greater exposure to emerging markets and going forward with new formats and products. Substantial cash flow for Tobacco markets in Europe will be brought by growth in emerging markets and pricing inelasticity, said Moody’s (NYSE:MCO) Investors Service in a report on Wednesday. The report said that Moody’s outlook for the tobacco sector for the next 12 to 18 months is positive, and that “Continuing solid cash flow generation will offset declining sales volumes in mature markets and mounting regulatory pressures,” said Paolo Leschiutta, senior credit officer in Moody’s Corporate Finance Group. “As such, we expect operating profit to continue to grow above 6% annually for the next 12 to 18 months.” Moody’s also pointed out that Imperial Tobacco Group PLC and Swedish Match AB are more exposed to mature markets. The principal risk that the analysts see would be a further decline in European macroeconomic conditions which could increase down-trading in the industry (but that is where the pricing inelasticities come in!).

Consolidated Edison (NYSE:ED) is set to meet with its largest union on Thursday under the auspices of federal mediators, since over a new labor contract stalled out and Con Ed locked out 8,500 workers. But having a meeting does not guarantee that the sides will renew negotiations, to say nothing about completing the new contract.

General Motors (NYSE:GM) Opel division ‘s partnership with Peugeot (PEUGY.PK) will be examined by Germany’s federal cartel office in a Phase II review. The evaluation will investigate the impact of the link of car parts suppliers. This latest inquiry follows the Monday signing of an arrangement in which GM is to transfer a majority of its business in Europe to the Peugeot division Gefco.