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 (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its solid stock price performance, expanding profit margins, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 26.21% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 69.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.50% is above that of the industry average.
- PHILIP MORRIS INTERNATIONAL reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. 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 ($5.18 versus $4.84).
- Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.44 is very low and demonstrates very weak liquidity.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.1%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
Philip Morris International Inc., through its subsidiaries, manufactures and sells cigarettes and other tobacco products. The company has a P/E ratio of 18.8, above the average tobacco industry P/E ratio of 18 and above the S&P 500 P/E ratio of 17.7. Philip Morris International has a market cap of $153.03 billion and is part of the
industry. Shares are up 15.7% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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