Reynolds American’s “Neutral” Rating Reaffirmed at Zacks (RAI)
Reynolds American (NYSE:RAI)‘s stock had its “neutral” rating reiterated by Zacks in a research report issued on Friday. They currently have a $61.00 price objective on the stock. Zacks‘s price target suggests a potential upside of 5.17% from the company’s current price.
Zacks’ analyst wrote, “Reynolds’ second-quarter 2014 earnings of $0.89 per share beat the Zacks Consensus Estimate and improved on the year-ago earnings by 2.3%. Higher cigarette and moist snuff pricing more than offset increased investment on the Vuse brand of e-cigarettes and led to the profit upswing in the quarter. Net sales however slipped 0.8% due to lower sales in the tobacco segment. Core brands like Camel, Pall Mall and Santa Fe continued to deliver strong performance. Reynolds’ continuous innovation in the smokeless and moist snuff products is helping it to maintain a dominant share in the category. Moreover, the company’s advancement in the e-cigarette category with the Vuse brand is encouraging. However, the high excise tax and anti-smoking regulations remain a persistent overhang. Again, the tobacco sector is facing declining volume for the past few quarters due to shift in demand from cigarettes to other non-tobacco products. We, therefore, prefer to stay on the sidelines “
Shares of Reynolds American (NYSE:RAI) traded up 0.14% on Friday, hitting $58.08. 632,813 shares of the company’s stock traded hands. Reynolds American has a one year low of $46.55 and a one year high of $63.39. The stock’s 50-day moving average is $57.80 and its 200-day moving average is $56.23. The company has a market cap of $30.857 billion and a P/E ratio of 19.51.
Reynolds American (NYSE:RAI) last issued its quarterly earnings data on Tuesday, July 29th. The company reported $0.89 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.87 by $0.02. The company had revenue of $2.16 billion for the quarter, compared to the consensus estimate of $2.19 billion. During the same quarter in the previous year, the company posted $0.84 earnings per share. The company’s revenue for the quarter was down .8% on a year-over-year basis. Analysts expect that Reynolds American will post $3.38 EPS for the current fiscal year.
The company also recently announced a quarterly dividend, which is scheduled for Wednesday, October 1st. Shareholders of record on Wednesday, September 10th will be paid a dividend of $0.67 per share. This represents a $2.68 annualized dividend and a dividend yield of 4.62%. The ex-dividend date is Monday, September 8th.
RAI has been the subject of a number of other recent research reports. Analysts at Morgan Stanley upgraded shares of Reynolds American from an “underweight” rating to an “equal weight” rating in a research note on Tuesday, August 5th. Separately, analysts at RBC Capital upgraded shares of Reynolds American from an “outperform” rating to a “top pick” rating in a research note on Monday, July 28th. They now have a $72.00 price target on the stock. Finally, analysts at RBC Capital upgraded shares of Reynolds American from a “sector perform” rating to an “outperform” rating in a research note on Monday, July 14th. They now have a $72.00 price target on the stock, up previously from $52.00. Five analysts have rated the stock with a hold rating, four have issued a buy rating and one has issued a strong buy rating to the stock. The company has a consensus rating of “Buy” and an average target price of $62.15.
Reynolds American Inc (NYSE:RAI) is a holding company.
To view Zacks’ full report, visit Zacks’ official website.
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