Philip Morris: Hold On For More Gains

+17.98%
Upside
91.62
Market
108
Trefis
PM: Philip Morris logo
PM
Philip Morris

Philip Morris stock (NYSE: PM) increased 6.8% in the last three months and currently trades near $78 per share. The rise was mainly due to the gradual lifting of the lockdowns over recent months which has led to expectations of higher cigarette shipments as supply constraints ease. But will Philip Morris’ stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s historical stock price data, returns for PM stock average close to 2.4% in the next three-month (63 trading days) period after experiencing a 6.8% rise over the previous three-month (63 trading days) period. Notably, though, the stock is likely to outperform the S&P500 over the three months, with an expected return which would be 0.8% higher compared to the S&P500.

But how would these numbers change if you are interested in holding PM stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning Engine to test PM stock chances of a rise after a fall and vice versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

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  2. Will Philip Morris Stock Rebound After A 10% Fall This Year?
  3. After 8% Drop This Year, Pricing Growth To Bolster Philip Morris’ Q3
  4. Pricing Gains To Drive Philip Morris’ Q2?
  5. Does Philip Morris Stock Have Upside Potential To Its Pre-Inflation Peak?
  6. Here’s What To Expect From Philip Morris’ Q1

MACHINE LEARNING ENGINE – try it yourself:

IF PM stock moved by -5% over 5 trading days, THEN over the next 21 trading days, PM stock moves an average of 2 percent, which implies a return which is 1 percent higher than that of the S&P500.

More importantly, there is 68% probability of a positive return over the next 21 trading days and 59% probability of a positive excess return after a -5% change over 5 trading days.

 

Some Fun Scenarios, FAQs & Making Sense of PM Stock Movements:

Question 1: Is the average return for Philip Morris International Inc stock higher after a drop?

Answer:

Consider two situations,

Case 1: Philip Morris International Inc stock drops by -5% or more in a week

Case 2: Philip Morris International Inc stock rises by 5% or more in a week

Is the average return for Philip Morris International Inc stock higher over the subsequent month after Case 1 or Case 2?

PM stock fares better after Case 1, with an average return of 2.7% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 2.3% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Philip Morris International Inc stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Philip Morris International Inc stock, the expectation is over time the near term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For PM stock, the returns over the next N days after a -5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is understandably lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks – although PM stock appears to be an exception to this general observation.

PM’s returns over the next N days after a 5% change over the last 5 trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Philip Morris International Inc stock by changing the inputs in the charts above.

What if you’re looking for a more balanced portfolio instead? Here’s a high quality portfolio to beat the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk, it has outperformed the broader market year after year, consistently.

 

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