Lorillard Inc. Stock Buy Recommendation Reiterated (LO)

NEW YORK ( TheStreet) -- Lorillard (NYSE: LO) has been reiterated by TheStreet Ratings as a buy with a ratings score of B-. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, increase in net income, revenue growth, expanding profit margins and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • LORILLARD INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, LORILLARD INC increased its bottom line by earning $2.81 versus $2.67 in the prior year. This year, the market expects an improvement in earnings ($3.10 versus $2.81).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Tobacco industry average. The net income increased by 47.1% when compared to the same quarter one year prior, rising from $223.00 million to $328.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 6.8%. Since the same quarter one year prior, revenues slightly increased by 5.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for LORILLARD INC is rather high; currently it is at 64.53%. It has increased significantly from the same period last year. Along with this, the net profit margin of 29.23% is above that of the industry average.
  • Net operating cash flow has slightly increased to $699.00 million or 1.30% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.78%.

Lorillard, Inc. manufactures and sells cigarettes in the United States. The company operates through two segments, Cigarettes and Electronic Cigarettes. The Cigarettes segment manufactures and sells cigarettes. Lorillard has a market cap of $17.2 billion and is part of the consumer goods sector and tobacco industry. Shares are up 17.7% year to date as of the close of trading on Tuesday.

You can view the full Lorillard Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
null

If you liked this article you might like

Reynolds Drops on Lorillard Debt; Stocks End Mixed on Jobs Report

Lorillard (LO) Stock Continues To Gain Following FTC Approval of Merger with Reynolds American

Stocks Extend Gains, Undeterred by Higher Dollar and Lower Oil

FTC Clears Reynolds to Inhale Lorillard for $27B by End of June

Lorrilard (LO) Stock Rising on Approval of Reynolds Merger