Where Is Philip Morris Stock Headed?

by Trefis Team
+11.50%
Upside
98.37
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Trefis
PM
Philip Morris International
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Philip Morris stock (NYSE: PM) is up 18% in the last six months and currently trades at $104 per share. Despite belonging to the defensive tobacco sector, the stock has registered impressive gains over recent months. With the global lockdowns gradually being lifted, Philip Morris’ supply constraints have been easing over recent months. This was reflected in Q1 and Q2 2021 where the company surpassed analysts’ expectations and provided a positive forecast for coming quarters. Heated tobacco shipments increased in the first six months of 2021, while the market share of heated tobacco units in markets where IQOS is sold was at 7.3% at the end of Q2 2021. With the vaping market expected to grow at a healthy double-digit rate in the coming years, Philip Morris is expected to benefit with higher IQOS sales. Rising demand for IQOS, higher cigarette prices, and a normalized supply network is likely to result in healthy revenue and margin growth in the coming quarters, which has led to a rise in the stock price over the last couple of months. But will PM’s 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 stock price data for the last ten years, returns for PM stock are likely to remain flat in the next one-month (21 trading days) period after experiencing an 18% rise over the previous six-month (126 trading days) period. Also, there is an equal chance (50%) of the stock giving positive or negative returns over the next one month. 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 Philip Morris 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 one day!

MACHINE LEARNING ENGINE – try it yourself:

IF PM stock moved by -5% over five trading days, THEN over the next 21 trading days, PM stock moves an average of 2.3 percent, with a 66% probability of a positive return.

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 2.3% 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 1.3% 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 five 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 five 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.

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