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

Zacks Equity Research

Philip Morris (PM) closed at $76.77 in the latest trading session, marking a +0.07% move from the prior day. The stock lagged the S&P 500's daily gain of 0.8%. At the same time, the Dow added 0.47%, and the tech-heavy Nasdaq gained 1.12%.

Prior to today's trading, shares of the seller of Marlboro and other cigarette brands had gained 5.07% over the past month. This has outpaced the Consumer Staples sector's loss of 1.5% and the S&P 500's loss of 1.07% in that time.

Wall Street will be looking for positivity from PM as it approaches its next earnings report date. This is expected to be October 17, 2019. In that report, analysts expect PM to post earnings of $1.35 per share. This would mark a year-over-year decline of 6.25%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.61 billion, up 1.41% from the year-ago period.

PM's full-year Zacks Consensus Estimates are calling for earnings of $5.20 per share and revenue of $29.89 billion. These results would represent year-over-year changes of +1.96% and +0.91%, respectively.

Investors should also note any recent changes to analyst estimates for PM. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.32% lower within the past month. PM is currently a Zacks Rank #3 (Hold).

Investors should also note PM's current valuation metrics, including its Forward P/E ratio of 14.75. For comparison, its industry has an average Forward P/E of 10.89, which means PM is trading at a premium to the group.

Also, we should mention that PM has a PEG ratio of 1.88. 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. PM's industry had an average PEG ratio of 1.5 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 64, putting it in the top 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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