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Philip Morris (PM) Gains But Lags Market: What You Should Know

Zacks Equity Research
Activision Blizzard (ATVI) closed the most recent trading day at $45.14, moving -1.27% from the previous trading session.

Philip Morris (PM) closed the most recent trading day at $85.77, moving +0.3% from the previous trading session. This change lagged the S&P 500's 0.66% gain on the day. At the same time, the Dow added 1.03%, and the tech-heavy Nasdaq gained 0.46%.

Coming into today, shares of the seller of Marlboro and other cigarette brands had lost 4.77% in the past month. In that same time, the Consumer Staples sector gained 2.76%, while the S&P 500 gained 3.97%.

Investors will be hoping for strength from PM as it approaches its next earnings release, which is expected to be April 18, 2019. In that report, analysts expect PM to post earnings of $1.01 per share. This would mark year-over-year growth of 1%. Meanwhile, our latest consensus estimate is calling for revenue of $6.74 billion, down 2.29% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.33 per share and revenue of $30.33 billion. These totals would mark changes of +4.51% and +2.37%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for PM. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.71% lower within the past month. PM is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, PM is holding a Forward P/E ratio of 16.06. For comparison, its industry has an average Forward P/E of 12.89, which means PM is trading at a premium to the group.

Also, we should mention that PM has a PEG ratio of 1.89. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Tobacco stocks are, on average, holding a PEG ratio of 1.75 based on yesterday's closing prices.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 73, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow PM in the coming trading sessions, be sure to utilize Zacks.com.


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