Close

Weakness in Tobacco Stocks Could be Buying Opportunity (RAI) (LO) (MO)

July 23, 2013 12:58 PM EDT
Get Alerts LO Hot Sheet
Price: $71.40 --0%

Rating Summary:
    3 Buy, 7 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 0 | Down: 0 | New: 0
Join SI Premium – FREE
Tobacco stocks fell on Tuesday after the FDA concluded that menthol cigarettes pose a greater risk to health than regular cigarettes. The news sent shares of Reynolds American Inc. (NYSE: RAI), Lorillard, Inc. (NYSE: LO), and Altria Group Inc. (NYSE: MO) lower.

The FDA review did not show evidence to suggest that menthol was more toxic or caused more disease, but data showed menthol smokers have a harder time quitting and that menthol aided smoking among young people. There was also evidence that menthol cigarettes reduce the harshness of smoking.

Commenting, Wells Fargo analyst Bonnie Herzog said, "The preliminary scientific evaluation indicates there is likely a public health impact of menthol in cigarettes" is somewhat softer than the menthol language from TPSAC's recommendation that 'removal of menthol cigarettes from the marketplace would benefit public health in the United States\' --suggesting that a ban is very unlikely."

JPMorgan agrees and thinks related weakness in Reynolds Americana and Altria Group is likely a buying opportunity.

For an analyst ratings summary and ratings history on Lorillard click here. For more ratings news on Lorillard click here.

Shares of Lorillard closed at $46.15 yesterday.


Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Analyst EPS View, FDA, Insiders' Blog, Trader Talk

Related Entities

JPMorgan, Wells Fargo