In the latest trading session, Philip Morris (PM) closed at $95.07, marking a +1.05% move from the previous day. The stock outpaced the S&P 500’s daily gain of 0.67%. At the same time, the Dow added 0.73%, and the tech-heavy Nasdaq gained 0.94%.
Heading into today, shares of the seller of Marlboro and other cigarette brands had lost 4.56% over the past month, lagging the Consumer Staples sector’s loss of 4.25% and the S&P 500’s loss of 3.8% in that time.
Philip Morris will be looking to display strength as it nears its next earnings release. On that day, Philip Morris is projected to report earnings of $1.65 per share, which would represent year-over-year growth of 7.84%. Meanwhile, our latest consensus estimate is calling for revenue of $9.25 billion, up 15.22% from the prior-year quarter.
PM’s full-year Zacks Consensus Estimates are calling for earnings of $6.21 per share and revenue of $35.42 billion. These results would represent year-over-year changes of +3.85% and +11.51%, respectively.
It is also important to note the recent changes to analyst estimates for Philip Morris. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% higher. Philip Morris is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, Philip Morris is holding a Forward P/E ratio of 15.14. For comparison, its industry has an average Forward P/E of 9.24, which means Philip Morris is trading at a premium to the group.
Meanwhile, PM’s PEG ratio is currently 1.96. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Tobacco was holding an average PEG ratio of 2.14 at yesterday’s closing price.
The Tobacco industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 111, putting it in the top 45% 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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