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Stock Market & Financial Investment News

News Breaks
May 19, 2014
10:54 EDTRAI, MO, LO, BTIWells upgrades Reynolds, sees high chance of Lorillard acquisition
Wells Fargo upgraded Reynolds American (RAI) in a note to investors earlier today, as the firm thinks the company will probably acquire its rival Lorillard (LO). The deal will enable the combined company to significantly cut its costs, Wells Fargo predicted. Moreover, following such a deal, Reynolds could become a takeover target for British American Tobacco (BTI), Wells stated, adding that investors should buy Reynolds' stock and sell shares of another company in the sector, Altria Group (MO). WHAT'S NEW: There's an 80% chance that Reynolds could acquire Lorillard, and Reynolds would obtain cost synergies of $400M from the deal, Wells analyst Bonnie Herzog wrote in a note to investors earlier today. Following the deal, British American Tobacco could either acquire the combined company or look to form a strategic partnership with it, Herzog predicted. Moreover, Reynolds' growth could accelerate, and the company's decision to return its former CEO, Susan Cameron, to her old post is positive for the stock, the analyst stated. Additionally, Herzog has become more confident in Reynolds' ability to effectively innovate, which is more crucial than ever in the e-cigarette era, she wrote. The analyst upgraded her rating on the stock to Outperform from Market Perform. WHAT'S NOTABLE: Another company in the sector, Altria Group (MO), is not well-positioned for the e-cigarette era, Herzog contended. The company may have the most to lose from the rise of vapor cigarettes, as its market share of the overall cigarette market will drop 15 percentage points as e-cigarettes become more popular, the analyst estimated. She cut her rating on the stock to Market Perform from Outperform but kept her price target range on the shares at $41-$43. Herzog identified Lorillard as her top pick in the U.S. tobacco sector, predicting that it will continue to be able to charge higher prices for its menthol cigarettes than any of its competitors, while its e-cigarette brand "has significant global potential." She reiterated an Outperform rating on the shares.
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August 21, 2014
12:00 EDTMOAltria Group raises quarterly dividend by 8.3% to 52c from 48c
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