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 downgraded by TheStreet Ratings from buy to hold. 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.
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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 28.10% 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).
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite 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. The company has a P/E ratio of 18, above the S&P 500 P/E ratio of 17.7. Philip Morris International has a market cap of $145.1 billion and is part of the consumer goods sector and tobacco industry. Shares are up 12.3% year to date as of the close of trading on Wednesday.
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-- Written by a member of TheStreet Ratings Staff
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