Ahead of its earnings announcement on Wednesday, April 23, 2025, Philip Morris International offers an appealing opportunity for event-focused investors. Historically, the stock has frequently seen gains following earnings releases. Over the last five years, PM has posted a positive one-day return in 11 of 20 earnings announcements, with a median gain of 3.8% and a peak return of 10.9%.
Although the actual stock movement depends on how results compare with consensus expectations, studying past trends may offer a strategic advantage. There are two main approaches to capitalize on this:
- Pre-Earnings Positioning: Assess the historical likelihood of a favorable move and take a position before the results are announced.
- Post-Earnings Analysis: Evaluate the link between immediate stock performance and medium-term returns, then plan positions after results are released.
Philip Morris International currently holds a market capitalization of $254 billion. Over the last twelve months, it generated $38 billion in revenue, with $13 billion in operating income and $7.1 billion in net income, indicating solid operational strength.
The market expects the upcoming earnings report to show earnings per share of $1.61 on revenue of $9.1 billion. This compares favorably to the same quarter last year, when EPS was $1.50 and sales were $8.8 billion. The projected growth is attributed to ongoing robust performance of its smoke-free product lines and improved pricing strategies.
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Philip Morris International’s Historical Odds Of Positive Post-Earnings Return
Key insights from one-day (1D) post-earnings data:
- Across 20 earnings releases in the past five years, PM posted 11 positive and 9 negative one-day returns, with positive moves occurring 55% of the time.
- This success rate improves to 58% when looking at only the last three years.
- Median return for the 11 positive instances = 3.8%, while the 9 negative cases had a median return of -2.7%.
Additional data for 5-day (5D) and 21-day (21D) post-earnings returns is summarized in the chart below.
Correlation Between 1D, 5D, and 21D Historical Returns
One lower-risk approach involves identifying correlations between short- and medium-term post-earnings returns and trading based on the strongest correlation pair. For example, if there’s a strong correlation between 1D and 5D returns, a positive 1D move could justify a long position over the following 5 days. Here is the correlation data from the past five and three years. Note: 1D_5D denotes the correlation between one-day and five-day returns post earnings.
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