Philip Morris (NYSE: PM) The results for the third quarter of 2022 are due to be announced on Thursday, October 20th. We expect revenue and earnings to likely come in slightly above street expectations. The company should benefit from continued growth in volume and pricing. However, headwinds in the forex market are likely to affect overall revenue growth. Not only do we expect the company to move well over the last quarter, our expectations are that PM’s stock is undervalued, as shown below. Interactive dashboard analysis for Philip Morris Earnings Preview Additional details.
(1) Revenue is expected to be slightly higher than consensus estimates
- Trefis estimates Philip Morris revenue for the third quarter of 2022 at approximately $7.6 billion, reflecting a mid-single-digit decline year-over-year and slightly above the consensus estimate of $7.4 billion.
- Philip Morris Corporation sells its tobacco products in non-US markets. Revenue is generated from the sale of cigarettes and its main smokeless tobacco offering – IQOS.
- While the company is expected to see continued growth in volume/mix and pricing, currency headwinds are likely to impact earnings growth.
- Looking at the second quarter of 2022, the company reported net revenue of $7.8 billion, marking a 3% increase over the prior year quarter.
- The revenue increase was mainly driven by increased shipments. Cigarette and hot tobacco shipment volume increased by 1.1% – reflecting 1.0% cigarette shipment volume growth and 1.9% hot tobacco unit charge volume growth.
- Our dashboard is on Philip Morris revenue More details about the company’s sectors.
(2) EPS likely to be slightly higher than consensus estimates
- Third-quarter 2022 adjusted earnings per share for Philip Morris are expected to be $1.40 per Trefis analysis, slightly above the consensus estimate of $1.37.
- The company’s net income of $2.3 billion in the second quarter of 2022 reflects an 8% decrease from its figure of $2.5 billion in the prior year quarter due to an operating margin declining more than 200 basis points year-over-year to 39%.
- For the full year 2022, we expect adjusted earnings per share to be lower at $5.71 compared to earnings per share of $6.08 in 2021.
(3) PM stock appears to be undervalued
- We appreciate Philip Morris review That would be around $111 a share, which is 29% more than the current market price of $86, which means investors are likely to be better off buying PM shares for better long-term gains.
- At current levels, PM stock is already trading at 15 times EPS of $5.71, compared to the last three years average of 16 times. We have assigned a higher PM multiplier, given the strong growth outlook for IQOS products.
- If the company reports upbeat third-quarter results and provides a better outlook than street estimates, the price-earnings multiplier will likely be revised higher, leading to higher PM stock levels.
While PM stock looks undervalued, it is useful to see how Philip Morris peers Fare on important metrics. You’ll find other valuable comparisons of companies across industries at Peer comparisons.
Moreover, the Covid-19 crisis has caused many price halts that could provide attractive trading opportunities. For example, you will be surprised how counterintuitive the stock valuation is Philip Morris vs. Intergy
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