NEW YORK (TheStreet) -- Shares of Philip Morris Int'l. (PM) were gaining, up 0.79% to $84.67 in pre-market trading Friday, after the tobacco producer had its rating raised to "neutral" from "sell" by analysts at Goldman Sachs this morning.
The firm set its price target to $87, citing the company's better underlying fundamentals in its key markets.
Philip Morris recently issued an update on its fiscal year 2015 earnings guidance. The company expects to earn between $4.32 to $4.42 per share for the period, compared to the Thomson Reuters consensus estimate of $4.39 per share.
Philip Morris Int'l. is a New York City-based global cigarette and tobacco company with brands including Marlboro, Philip Morris, Merit, Parliament, and Virginia Slims.
Separately, TheStreet Ratings team rates PHILIP MORRIS INTERNATIONAL as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate PHILIP MORRIS INTERNATIONAL (PM) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. Among the primary strengths of the company is its expanding profit margins over time. At the same time, however, we also find weaknesses including weak operating cash flow, feeble growth in the company's earnings per share and a generally disappointing performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite the weak revenue results, PM has outperformed against the industry average of 23.1%. Since the same quarter one year prior, revenues slightly dropped by 4.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for PHILIP MORRIS INTERNATIONAL is rather high; currently it is at 65.98%. Regardless of PM's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, PM's net profit margin of 27.13% compares favorably to the industry average.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Tobacco industry average. The net income has decreased by 4.3% when compared to the same quarter one year ago, dropping from $1,875.00 million to $1,795.00 million.
- PHILIP MORRIS INTERNATIONAL' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, PHILIP MORRIS INTERNATIONAL reported lower earnings of $4.76 versus $5.26 in the prior year. For the next year, the market is expecting a contraction of 7.6% in earnings ($4.40 versus $4.76).
- Net operating cash flow has significantly decreased to -$375.00 million or 152.44% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: PM Ratings Report