Lorillard Rating Lowered to Hold at Jefferies Group (LO)
Lorillard (NYSE:LO) was downgraded by equities research analysts at Jefferies Group from a “buy” rating to a “hold” rating in a research note issued to investors on Thursday, TheFlyOnTheWall.com reports. They currently have a $51.00 price objective on the stock, down from their previous price objective of $54.00. Jefferies Group’s target price would indicate a potential upside of 8.60% from the company’s current price.
The analysts wrote, “underwhelming” performance of the recently launched Newport Gold and the uncertainty of the e-cigarette profit outlook. The analyst commented, “While we continue to view LO’s cigarette portfolio as the strongest in the industry, our Gold volume opportunity driven Buy thesis is not developing as expected and we therefore see less upside to the stock price.” According to Lorillard’s management, smokers who have tried Newport Gold report that the product is “outstanding”. Unfortunately, the product is not creating enough trial to deliver upon the analyst’s market share expectations of a forecasted 1% (versus the actual 0.3%). Due to the disappointing number, Wrede reduced volume and margin outlook for the company. The analyst reported that he is uncertain on the future for the e-cigarette as the e-cigarette segment barely broke even in the fourth quarter of 2013. Jefferies added that the “FDA regulation of the category (the timing for an announcement or the scope of the announcement are unclear at the moment) could also meaningfully alter the growth trajectory.”
Several other analysts have also recently commented on the stock. Analysts at Zacks reiterated a “neutral” rating on shares of Lorillard in a research note on Thursday, December 19th. They now have a $52.00 price target on the stock. Analysts at RBC Capital initiated coverage on shares of Lorillard in a research note on Monday, November 25th. They set an “outperform” rating and a $65.00 price target on the stock. One investment analyst has rated the stock with a sell rating, six have assigned a hold rating and four have issued a buy rating to the company. The stock currently has an average rating of “Hold” and an average price target of $50.00.
Shares of Lorillard (NYSE:LO) traded up 0.53% on Thursday, hitting $47.72. The stock had a trading volume of 4,382,607 shares. Lorillard has a 52-week low of $37.95 and a 52-week high of $53.27. The stock has a 50-day moving average of $49.46 and a 200-day moving average of $47.65. The company has a market cap of $17.578 billion and a price-to-earnings ratio of 14.92. Lorillard also saw some unusual options trading activity on Wednesday. Traders acquired 9,386 put options on the stock. This represents an increase of 404% compared to the average volume of 1,864 put options.
Lorillard (NYSE:LO) last announced its earnings results on Wednesday, February 12th. The company reported $0.82 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.86 by $0.04. The company had revenue of $1.74 billion for the quarter, compared to the consensus estimate of $1.31 billion. During the same quarter in the previous year, the company posted $0.79 earnings per share. The company’s revenue for the quarter was up 3.6% on a year-over-year basis. Analysts expect that Lorillard will post $3.52 EPS for the current fiscal year.
Lorillard, Inc (NYSE:LO) is the manufacturer of cigarettes in the United States.
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