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

Zacks Equity Research

Philip Morris (PM) closed at $77.45 in the latest trading session, marking a +1.41% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.91%. Elsewhere, the Dow gained 0.7%, while the tech-heavy Nasdaq added 1.02%.

Prior to today's trading, shares of the seller of Marlboro and other cigarette brands had gained 2.51% over the past month. This has outpaced the Consumer Staples sector's loss of 2.39% and the S&P 500's loss of 2.74% in that time.

Investors will be hoping for strength from PM as it approaches its next earnings release, which is expected to be October 17, 2019. The company is expected to report EPS of $1.35, down 6.25% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $7.61 billion, up 1.41% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.20 per share and revenue of $29.89 billion. These totals would mark changes of +1.96% and +0.91%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for PM. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.32% lower. PM is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, PM currently has a Forward P/E ratio of 14.68. Its industry sports an average Forward P/E of 10.89, so we one might conclude that PM is trading at a premium comparatively.

Meanwhile, PM's PEG ratio is currently 1.87. 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. The Tobacco industry currently had an average PEG ratio of 1.57 as of yesterday's close.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 166, which puts it in the bottom 35% 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.

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

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