This story originally appeared on Zacks
Philip Morris (PM) closed the most recent trading day at $97.41, moving +1.52% from the previous trading session. The stock outpaced the S&P 500’s daily loss of 0.1%. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 0.47%.
Prior to today’s trading, shares of the seller of Marlboro and other cigarette brands had gained 6.74% over the past month. This has lagged the Consumer Staples sector’s gain of 7.91% and outpaced the S&P 500’s gain of 3.67% in that time.
Investors will be hoping for strength from Philip Morris as it approaches its next earnings release. On that day, Philip Morris is projected to report earnings of $1.32 per share, which would represent year-over-year growth of 4.76%. Meanwhile, our latest consensus estimate is calling for revenue of $7.84 billion, up 5.26% from the prior-year quarter.
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 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. Within the past 30 days, our consensus EPS projection has moved 0.04% lower. Philip Morris currently has a Zacks Rank of #3 (Hold).
Investors should also note Philip Morris’s current valuation metrics, including its Forward P/E 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 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. The Tobacco industry currently had an average PEG ratio of 1.92 as of yesterday’s close.
The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 55, which puts it in the top 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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