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Philip Morris International Inc. Stock Hold Recommendation Reiterated (PM)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK (TheStreet) -- Philip Morris International (NYSE:PM) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+ . The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and weak operating cash flow.

  • EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

  • The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 69.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.11% is above that of the industry average.
  • PHILIP MORRIS INTERNATIONAL' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PHILIP MORRIS INTERNATIONAL increased its bottom line by earning $4.84 versus $3.92 in the prior year. This year, the market expects an improvement in earnings ($5.21 versus $4.84).
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Tobacco industry average. The net income has decreased by 6.3% when compared to the same quarter one year ago, dropping from $2,377.00 million to $2,227.00 million.
  • Net operating cash flow has decreased to $2,393.00 million or 21.61% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.

Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes and other tobacco products. Philip Morris International has a market cap of $150.4 billion and is part of the consumer goods sector and tobacco industry. The company has a P/E ratio of 18.7, above the S&P 500 P/E ratio of 17.7. Shares are up 7.6% year to date as of the close of trading on Wednesday.

You can view the full Philip Morris International Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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