Philip Morris Reports Strong Q3 Results; Street Says Buy

Cigarette and tobacco manufacturing company Philip Morris International Inc. (PM) has reported strong results for the third quarter ended September 30, 2021. The robust results were primarily driven by the growth witnessed in net revenues.

Following the news, shares of the company declined 1.7% on Tuesday. The stock, however, pared its losses slightly to close at $95.90 in the extended trading session.

Philip Morris reported quarterly net revenues of $8.1 billion, up 9.1% from the prior year’s figure of $7.4 billion. Moreover, the figure surpassed the Street’s estimate of $7.9 billion. Favorable volume mix in the EU region and Japan, along with higher device volume in Japan, primarily favored the growth witnessed in sales.

The company reported quarterly earnings of $1.58 per share, up 11.3% from the year-ago period. Further, the figure topped the consensus estimate of $1.55 per share.

Notably, the company also increased its quarterly dividend by 4.2% to an annualized rate of $5 per common share. Further, it repurchased 0.9 million shares of its common stock for $94 million at an average price of $98.99 per share.

The CEO of Philip Morris, Jacek Olczak, said, “Our business delivered another strong quarterly performance, coming ahead of our expectations with adjusted diluted EPS of $1.58, representing growth of 8.5%, excluding currency. The continued excellent performance of IQOS drove total shipment volume and organic net revenue growth of 2.1% and 7.6%, respectively, and was complemented by further sequential share gains for our combustible products.” (See Philip Morris stock chart on TipRanks)

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Last month, Piper Sandler analyst Michael Lavery reiterated a Buy rating on the stock with a price target of $116, which implies upside potential of 21.1% from current levels.

Consensus among analysts is a Strong Buy based on 5 unanimous Buys. The average Philip Morris price target of $115.50 implies upside potential of 20.6%.

Philip Morris scores a 9 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 30.6% over the past year.

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