The firm said it upgraded its rating on the holding company, which operates subsidiaries in the cigarette and related tobacco products industry, based on favorable industry pricing trends, recent changes in management, the possibility of a merger with Lorillard Inc. (LO), and continuing collaboration with British American Tobacco (BTI).
Bank of America/Merrill Lynch raised its price target on Reynolds America to $65 from $63.
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TheStreet Ratings team rates REYNOLDS AMERICAN INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate REYNOLDS AMERICAN INC (RAI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."