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Philip Morris (PM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Philip Morris (PM) closed at $72.97 in the latest trading session, marking a +1.42% move from the prior day. This move outpaced the S&P 500's daily gain of 0.09%. Elsewhere, the Dow gained 0.26%, while the tech-heavy Nasdaq lost 0.17%.

Heading into today, shares of the seller of Marlboro and other cigarette brands had lost 12.77% over the past month, lagging the Consumer Staples sector's gain of 3.66% and the S&P 500's gain of 4.92% in that time.

PM will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.37, down 4.86% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.67 billion, up 2.18% from the year-ago period.

PM's full-year Zacks Consensus Estimates are calling for earnings of $5.21 per share and revenue of $29.91 billion. These results would represent year-over-year changes of +2.16% and +0.95%, respectively.

Investors should also note any recent changes to analyst estimates for PM. These recent revisions tend to reflect the evolving nature of short-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 remained stagnant. PM is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note PM's current valuation metrics, including its Forward P/E ratio of 13.82. This valuation marks a premium compared to its industry's average Forward P/E of 10.69.

We can also see that PM currently has a PEG ratio of 1.76. 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 1.37 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 18, putting it in the top 8% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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