How Will Philip Morris International Stock React To Its Upcoming Earnings?

Ahead of its earnings report on Wednesday, April 23, 2025, Philip Morris International (NYSE:PM) presents an interesting case for event-driven traders. Historically, the company’s stock has often experienced positive movement following earnings releases. Over the past five years, PM has shown positive one-day returns in 11 out of 20 earnings announcements, with a median positive return of 3.8% and a maximum of 10.9%.

While the actual market reaction will depend on how the reported results compare to consensus estimates and market expectations, understanding these historical patterns could offer a potential edge. There are two primary strategies for leveraging this:

1. Pre-Earnings Positioning: Analyze the historical probability of a positive reaction and establish a position before the earnings are released.
2. Post-Earnings Analysis: Examine the correlation between the immediate stock reaction and medium-term returns following earnings, and then position accordingly after the announcement.

Image by Christo Anestev from Pixabay

Currently, Philip Morris International has a market capitalization of $254 billion. Its revenue over the last twelve months was $38 billion, with a strong operational performance resulting in $13 billion in operating profits and a net income of $7.1 billion.

The consensus forecast for the upcoming earnings report anticipates earnings per share (EPS) of $1.61 on sales of $9.1 billion. This represents an increase compared to the same quarter last year, which saw EPS of $1.50 on sales of $8.8 billion. This growth is likely to be driven by continued strong sales of the company’s smoke-free products and improved pricing.

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Philip Morris International’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 11 positive and 9 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 55% of the time.
• Notably, this percentage increases to 58% if we consider data for the last 3 years instead of 5.
• Median of the 11 positive returns = 3.8%, and median of the 9 negative returns = -2.7%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

PM observed 1D, 5D, and 21D returns post earnings

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

PM Correlation Between 1D, 5D and 21D Historical Returns

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