Philip Morris

Why Philip Morris Stock Is Trading Close To Multi-Year Highs

Philip Morris Stock Moves Higher After The Company Reveals A New Buyback Program

Shares of Philip Morris opened with a gap up and made an attempt to settle above multi-year highs after the company announced a new three-year share repurchase program of up to $7 billion.

Philip Morris expects to spend $5 billion – $7 billion on this program over the next three years. Meanwhile, the quarterly dividend remained intact at $1.20 per share. At current stock price levels, Philip Morris yields about 4.9% and remains attractive for yield-oriented investors.

Previously, the company reaffirmed its 2021 full-year outlook. This year, Philip Morris expects to report adjusted diluted earnings of $5.95 – $6.05 per share, so the stock is currently trading at about 16 forward P/E for 2021.

For the next year, analysts expect that Philip Morris will report earnings of $6.71 per share. It should be noted that analyst estimates have been moving higher in recent weeks which is bullish for the stock.

What’s Next For Philip Morris Stock?

Treasury yields have moved lower in recent trading sessions which is bullish for dividend stocks like Philip Morris. While investors are sometimes concerned about the future of tobacco companies, the reasonable valuation and decent yields continue to attract those investors who search for good deals in the current market environment.

The stock is currently trading near multi-year highs, but it looks that there is plenty of room to gain additional upside momentum, especially in case inflation fears continue to decrease.

Analyst estimates call for solid earnings growth in 2022, which is good for the company of this size. Philip Morris will report its second-quarter results on July 20, 2021, so traders will have to wait for more than a month for new significant catalysts, but reasonable valuation and new buyback program may be sufficient enough to push the stock to new highs ahead of the earnings report.

For a look at all of today’s economic events, check out our economic calendar.