Reynolds American Upgraded to “Buy” by Bank of America (RAI)
Reynolds American (NYSE:RAI) was upgraded by equities researchers at Bank of America from a “neutral” rating to a “buy” rating in a research report issued on Wednesday, TheFlyOnTheWall.com reports. The firm currently has a $65.00 price objective on the stock, up from their previous price objective of $63.00. Bank of America’s target price indicates a potential upside of 9.69% from the company’s current price.
The analysts wrote, “We have boosted our 2014/2015 EPS est by 2c/3c to $3.38/$3.66 respectively, due to slightly better cigarette price realization than prior ests (+4.3% vs. prior +3.9%e) and cigarette op. margins (+20bps/+30bps to 37.9%/ 38.9% in 2014/15). We have not factored in $266mn in pending MSA credits. “We are lifting our PO from $63 to $65 given higher EPS ests and our belief that the factors discussed above will continue. At a 2015 P/E target multiple of 17.8x, we acknowledge that this is at the top of its historical norm. Risks to our PO are potential accelerated cigarette category declines, poor price realization, increased regulation, taxes, & litigation.”
In other Reynolds American news, major shareholder & Williamson Holdings I. Brown sold 72,522 shares of Reynolds American stock on the open market in a transaction that occurred on Thursday, May 29th. The shares were sold at an average price of $45.12, for a total value of $3,272,192.64. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Large shareholders that own at least 10% of a company’s stock are required to disclose their transactions with the SEC.
A number of other analysts have also recently weighed in on RAI. Analysts at Zacks reiterated a “neutral” rating on shares of Reynolds American in a research note on Thursday, April 24th. They now have a $56.00 price target on the stock. Analysts at Nomura initiated coverage on shares of Reynolds American in a research note on Tuesday, April 8th. They set a “buy” rating and a $66.00 price target on the stock. Four research analysts have rated the stock with a hold rating and five have issued a buy rating to the company. Reynolds American has an average rating of “Buy” and an average price target of $57.82.
Reynolds American (NYSE:RAI) opened at 60.08 on Wednesday. Reynolds American has a 1-year low of $46.05 and a 1-year high of $60.42. The stock has a 50-day moving average of $57.35 and a 200-day moving average of $52.47. The company has a market cap of $32.205 billion and a P/E ratio of 20.47.
Reynolds American (NYSE:RAI) last issued its quarterly earnings data on Wednesday, April 23rd. The company reported $0.72 earnings per share (EPS) for the quarter, missing the consensus estimate of $0.74 by $0.02. The company had revenue of $1.94 billion for the quarter, compared to the consensus estimate of $1.91 billion. During the same quarter in the previous year, the company posted $0.72 earnings per share. The company’s revenue for the quarter was up 2.8% on a year-over-year basis. On average, analysts predict that Reynolds American will post $3.35 earnings per share for the current fiscal year.
The company also recently announced a quarterly dividend, which is scheduled for Tuesday, July 1st. Shareholders of record on Tuesday, June 10th will be paid a dividend of $0.67 per share. This represents a $2.68 dividend on an annualized basis and a dividend yield of 4.52%. The ex-dividend date of this dividend is Friday, June 6th.
Reynolds American Inc (NYSE:RAI) is a holding company.
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