Philip Morris (PM) Gains As Market Dips: What You Should Know

This story originally appeared on Zacks

Philip Morris (PM) closed the last trading day at $97.41, up 1.52% from the previous trading session. The stock surpassed the S&P 500’s daily loss of 0.1%. Elsewhere, the Dow Jones lost 0.47%, while the big tech Nasdaq lost 0.47%.

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Ahead of today’s trading, shares of Marlboro seller and other cigarette brands are up 6.74% over the past month. This slowed the consumer goods sector’s gain by 7.91% and outpaced the S&P 500’s gain of 3.67% at the time.

Investors are hoping for some strength from Philip Morris as it nears its next earnings release. On that day, Philip Morris is expected to report earnings of $1.32 per share, representing annual growth of 4.76%. Meanwhile, our latest consensus estimate calls for revenue of $7.84 billion, up 5.26% from the prior year quarter.

It’s also important to note recent changes in analyst estimates for Philip Morris. Recent reviews tend to reflect the latest near-term business trends. As a result, we can interpret positive rating reviews as a good sign of the company’s business outlook.

Research indicates that these discretionary revisions are directly related to the stock’s near-term price momentum. We developed Zacks Rank to take advantage of this phenomenon. Our system takes these discretionary changes into account and provides a clear and actionable rating model.

The Zacks Rank system ranges from #1 (strong buy) to #5 (strong sell). The company has a successful and externally audited track record, with No. 1 stocks having generated an average annual return of more than 25% since 1988. In the past 30 days, our consolidated EPS forecast is down 0.04%. Philip Morris is currently rated by Zacks No. 3 (Hold).

Investors should also note Philip Morris’ current valuation metrics, including a forward price-to-earnings ratio of 15.04. For comparison, its industry has an average forward P/E of 9.26, which means Philip Morris is trading at a premium to the group.

We can also see that PM currently has a PEG ratio of 1.92. The price-earnings-growth (PEG) ratio is similar to the widely used price-to-earnings (P/E) ratio, but this metric also takes into account a company’s expected earnings growth rate. The tobacco industry currently has an average PEG of 1.92 as of yesterday’s close.

The tobacco industry is part of the consumer goods sector. The industry currently has a Zacks Industry Rating of 55, placing it in the top 22% of all 250+ industries.

The Zacks Industry Ranking measures the strength of our individual industry groups by measuring the average Zacks rating of the individual stocks within the groups. Our research shows that industries ranked 50% outperform the bottom half by a factor of 2 to 1.

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