Investors in Philip Morris International Inc. (NYSE:PM) had a good week, as its shares rose 6.2% to close at US$88.75 following the release of its annual results. Results were roughly in line with estimates, with revenues of US$30b and statutory earnings per share of US$4.61. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Philip Morris International after the latest results.
Taking into account the latest results, the latest consensus from Philip Morris International's 14 analysts is for revenues of US$31.2b in 2020, which would reflect a modest 4.6% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to soar 21% to US$5.58. Yet prior to the latest earnings, analysts had been forecasting revenues of US$31.5b and earnings per share (EPS) of US$5.62 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$95.53, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Philip Morris International, with the most bullish analyst valuing it at US$114 and the most bearish at US$80.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Further, we can compare these estimates to past performance, and see how Philip Morris International forecasts compare to the wider market's forecast performance. Analysts are definitely expecting Philip Morris International's growth to accelerate, with the forecast 4.6% growth ranking favourably alongside historical growth of 1.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.9% per year. It seems obvious that, while the growth outlook is brighter than the recent past, analysts also expect Philip Morris International to grow faster than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - and our data does suggest that Philip Morris International's revenues are expected to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Philip Morris International. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Philip Morris International going out to 2024, and you can see them free on our platform here..
You can also view our analysis of Philip Morris International's balance sheet, and whether we think Philip Morris International is carrying too much debt, for free on our platform here.
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