Why Lorillard (LO) Stock Is Gaining Today

NEW YORK (TheStreet) -- Lorillard (LO) shares are up 4.4% to $63.87 on Thursday following a CNBC report saying that its merger with Reynolds American (RAI) is on track to be consummated in the coming weeks.

Imperial Tobacco (ITYBY) will likely purchase the divested assets needed to make Reynolds acquisition of Lorillard regulation freindly -- Reynolds and Lorillard are the second and third largest tobacco companies in the U.S., respectively -- according the CNBC sources.

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Reports surfaced Monday that Imperial Tobacco would be selling a 30% stake in its Madrid unit in an effort to raise $800 million to purchase any potential divested assets.

Reynolds American shares are up 1.3% to $60.97 while Imperial Tobacco shares are gaining 2.7% to $91.90. 

TheStreet Ratings team rates LORILLARD INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate LORILLARD INC (LO) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

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