Philip Morris (PM, $76.40) beats Q2 earnings expectation; reinstates full-year guidance

Philip Morris  reported second-quarter earnings that surpassed analysts’ forecasts. The cigarette company also resumed  issuing its full-year guidance.

The company’s earnings for the quarter came in at $1.29 an adjusted share, beating analysts’ forecast of $1.10 a share . The figure in the year-ago quarter was $1.46 a share.

Revenue of $6.65 billion came in above the $6.5 billion expected by analysts.

Cigarette and heated tobacco unit shipment volume fell -14.5%, on a -17.6% decrease in cigarette shipment volumes. Heated tobacco unit shipment volume was up by +24.3%.

The company  now projects full-year adjusted per-share earnings of between $4.92 to $5.07. (following withdrawal of guidance in the first quarter amid the coronavirus pandemic).

At quarter-end, total users of Philip Morris’ smokeless product IQOS were around 15.4 million, of which approximately 11.2 million had stopped smoking and switched to IQOS (according to Philip Morris).

According to Tickeron, PM's Aroon indicator drops into Downtrend on July 08, 2020

This move indicates a strong Downtrend ahead for PM, and traders may view it as a Sell signal for the next month. Traders may consider selling the ticker or exploring put options. In 58 of 125 cases where PM Aroon's Indicator entered a Downtrend, the price fell further within the following month. The odds of a continued Downtrend are 46%.

Current price $76.40 crossed the support line at $76.23 and is trading between $78.30 support and $76.23 support lines. Throughout the month of 06/17/20 - 07/20/20, the price experienced a -0.05% Downtrend. During the week of 07/13/20 - 07/20/20, the stock fell -0.83%.

Technical Analysis (Indicators)

Bearish Trend Analysis

The Stochastic Indicator demonstrated that the ticker has stayed in the overbought zone for 5 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.

Following a 3-day Decline, the ticker is projected to fall further. Considering data from situations where PM declined for three days, in 128 of 289 cases, the price rose further within the following month. The odds of a continued Downtrend are 44%.

Bullish Trend Analysis

The Momentum Indicator exceeded the 0 level on July 07, 2020. Traders may consider buying the ticker or exploring call options. In 40 of 86 cases where the ticker's Momentum Indicator exceeded 0, its price rose further within the subsequent month. The odds of a continued Uptrend are 47%.

The Moving Average Convergence Divergence (MACD) just turned positive. Considering data from situations where PM's MACD histogram became positive, in 17 of 40 cases, the price rose further within the following month. The odds of a continued Uptrend are 43%.

The price moved above its 50-day Moving Average, which indicates a change from a Downtrend to an Uptrend. In 30 of 55 similar backtested cases where PM's price crossed above its 50-day Moving Average, its price rose further within the subsequent month. The odds of a continued Uptrend are 55%.

The 10-day Moving Average for this ticker crossed above its 50-day Moving Average on July 13, 2020, which can be construed as a buy signal, indicating that the trend is shifting higher. In 8 of 16 similar cases where PM's 10-day Moving Average crossed above its 50-day Moving Average, the price rose further within the following month. The odds of a continued Uptrend are 50%.

Fundamental Analysis (Ratings)

Tickeron has a positive outlook on this ticker and predicts a further increase by more than 4.00% within the next month with a likelihood of 76%. During the last month, the daily ratio of advancing to declining volumes was 1 to 1.27.

The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Profit vs. Risk Rating rating for this company is 86 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. PM’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 98, placing this stock better than average.

The Tickeron PE Growth Rating for this company is 70 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Price Growth Rating for this company is 55 (best 1 - 100 worst), indicating steady price growth. PM’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron Valuation Rating of 11 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: PM's P/B Ratio (-8.77) is slightly lower than the industry average of (1.87). P/E Ratio (14.86) is within average values for comparable stocks, (27.57). PM's Projected Growth (PEG Ratio) (1.32) is slightly higher than the industry average of (0.79). Dividend Yield (5.43) settles around the average of (5.56) among similar stocks. PM's P/S Ratio (3.76) is slightly higher than the industry average of (1.88).

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