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

Zacks Equity Research

In the latest trading session, Philip Morris (PM) closed at $85.99, marking a +0.34% move from the previous day. This change lagged the S&P 500's 0.45% gain on the day. At the same time, the Dow added 0.49%, and the tech-heavy Nasdaq gained 0.67%.

Heading into today, shares of the seller of Marlboro and other cigarette brands had gained 2.66% over the past month, outpacing the Consumer Staples sector's gain of 2.6% and the S&P 500's gain of 2.44% in that time.

PM will be looking to display strength as it nears its next earnings release. On that day, PM is projected to report earnings of $1.24 per share, which would represent a year-over-year decline of 0.8%. Meanwhile, our latest consensus estimate is calling for revenue of $7.75 billion, up 3.31% from the prior-year quarter.

PM's full-year Zacks Consensus Estimates are calling for earnings of $5.19 per share and revenue of $29.82 billion. These results would represent year-over-year changes of +1.76% and +0.66%, 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 such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.7% lower. PM currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, PM is holding a Forward P/E ratio of 16.5. For comparison, its industry has an average Forward P/E of 12.77, which means PM is trading at a premium to the group.

Also, we should mention that PM has a PEG ratio of 2.12. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. PM's industry had an average PEG ratio of 1.91 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 173, which puts it in the bottom 33% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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