Goldman Sachs Reinstates Reynolds American (RAI) at Conviction Buy

Goldman Sachs reinstates coverage on Reynolds American (NYSE: RAI) with a Conviction Buy List rating and a price target of $81.00 following the Lorillard acquisition.

"Post the Lorillard acquisition, the new RAI has emerged with a best-in-class brand portfolio, better pricing power and cost synergies to drive over 700bps of operating margin expansion and EPS growth of 16% in 2016E and 9% in 2017E," the analyst said.

The firm's pro-forma estimates are $3.83 for 2015 and rise to $4.45 for 2016 and $4.85 for 2017.

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

Shares of Reynolds American closed at $72.60 yesterday.

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