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Philip Morris (PM) Gains But Lags Market: What You Should Know

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Philip Morris (PM - Free Report) closed the most recent trading day at $78.50, moving +1.78% from the previous trading session. The stock lagged the S&P 500's daily gain of 2.14%. Meanwhile, the Dow gained 2.06%, and the Nasdaq, a tech-heavy index, added 2.65%.

Coming into today, shares of the seller of Marlboro and other cigarette brands had lost 7.65% in the past month. In that same time, the Consumer Staples sector lost 2.74%, while the S&P 500 lost 6.63%.

Wall Street will be looking for positivity from PM as it approaches its next earnings report date. The company is expected to report EPS of $1.33, down 5.67% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.39 billion, down 4.38% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.16 per share and revenue of $29.69 billion, which would represent changes of +1.18% and +0.22%, respectively, from the prior year.

Investors might also notice 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 1.28% higher. PM is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, PM is holding a Forward P/E ratio of 15.25. For comparison, its industry has an average Forward P/E of 12.48, which means PM is trading at a premium to the group.

It is also worth noting that PM currently has a PEG ratio of 1.86. 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 was holding an average PEG ratio of 1.57 at yesterday's closing price.

The Tobacco industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 241, which puts it in the bottom 6% 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.

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