Reynolds American Inc. (NYSE:RAI) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued on Tuesday.
According to Zacks, “Estimates have remained unchanged in the past 60 days as Reynolds continues to struggle due to increased competition in the vapor category, declining volumes, strict anti-smoking regulations by governments globally and currency headwinds. Reynolds is losing share in Moist Snuff segment and the performance of Camel brand remains under pressure. Additionally, the cigarette maker is likely to face margin pressure due to pricing power of other major tobacco players and rising cost of sales. However the shares of this tobacco maker outperformed the Zacks categorized Tobacco industry in the last three months. Despite high excise tax and anti-smoking regulations, the Newport brand has been performing strongly. Further, investors are curious if British American will bid higher to buy Reynolds American's remaining stake, after the rejection of initial bid.”
A number of other research firms have also issued reports on RAI. RBC Capital Markets set a $54.00 target price on Reynolds American and gave the company a “buy” rating in a report on Monday, January 2nd. Vetr lowered Reynolds American from a “buy” rating to a “hold” rating and set a $56.50 price objective on the stock. in a report on Thursday, December 22nd. lowered Reynolds American from an “outperform” rating to an “underperform” rating and upped their price objective for the stock from $52.00 to $55.00 in a report on Monday, October 24th. Wells Fargo & Co. reaffirmed an “outperform” rating on shares of Reynolds American in a report on Sunday, October 23rd. Finally, Morgan Stanley reaffirmed an “equal weight” rating and set a $52.00 price objective on shares of Reynolds American in a report on Saturday, October 22nd. Two research analysts have rated the stock with a sell rating, four have issued a hold rating and nine have given a buy rating to the company. The company currently has an average rating of “Hold” and a consensus price target of $56.58.
Reynolds American (NYSE:RAI) opened at 58.00 on Tuesday. The firm has a 50-day moving average price of $55.66 and a 200-day moving average price of $51.95. The stock has a market cap of $82.70 billion, a price-to-earnings ratio of 15.07 and a beta of 0.35. Reynolds American has a one year low of $43.38 and a one year high of $58.15.
Reynolds American (NYSE:RAI) last released its earnings results on Wednesday, October 19th. The company reported $0.61 earnings per share (EPS) for the quarter, missing the Zacks’ consensus estimate of $0.65 by $0.04. The company earned $3.21 billion during the quarter, compared to analyst estimates of $3.31 billion. Reynolds American had a net margin of 44.47% and a return on equity of 15.13%. The company’s revenue for the quarter was up 1.4% on a year-over-year basis. During the same period in the previous year, the firm posted $0.55 EPS. On average, equities analysts predict that Reynolds American will post $2.30 earnings per share for the current year.
The business also recently disclosed a quarterly dividend, which was paid on Tuesday, January 3rd. Stockholders of record on Monday, December 12th were given a $0.46 dividend. The ex-dividend date was Thursday, December 8th. This represents a $1.84 annualized dividend and a dividend yield of 3.17%. Reynolds American’s dividend payout ratio is currently 47.92%.
In other news, CEO Debra Ann Crew sold 10,818 shares of the company’s stock in a transaction on Wednesday, October 26th. The stock was sold at an average price of $54.54, for a total value of $590,013.72. Following the sale, the chief executive officer now directly owns 41,835 shares in the company, valued at $2,281,680.90. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. 0.11% of the stock is owned by insiders.
A number of institutional investors have recently added to or reduced their stakes in RAI. Nisa Investment Advisors LLC increased its position in Reynolds American by 3.1% in the second quarter. Nisa Investment Advisors LLC now owns 265,838 shares of the company’s stock valued at $14,335,000 after buying an additional 8,076 shares during the period. LS Investment Advisors LLC increased its position in Reynolds American by 307.2% in the second quarter. LS Investment Advisors LLC now owns 24,842 shares of the company’s stock valued at $1,340,000 after buying an additional 18,741 shares during the period. Oakbrook Investments LLC increased its position in Reynolds American by 0.9% in the second quarter. Oakbrook Investments LLC now owns 45,766 shares of the company’s stock valued at $2,468,000 after buying an additional 400 shares during the period. Shell Asset Management Co. increased its position in Reynolds American by 23.7% in the second quarter. Shell Asset Management Co. now owns 126,389 shares of the company’s stock valued at $6,816,000 after buying an additional 24,186 shares during the period. Finally, Bank of Montreal Can acquired a new position in Reynolds American during the second quarter valued at $51,452,000. Hedge funds and other institutional investors own 46.02% of the company’s stock.
About Reynolds American
Reynolds American Inc (RAI) is a holding company. The Company’s segments are RJR Tobacco, Santa Fe and American Snuff. The RJR Tobacco segment consists principally of the primary operations of R. J. Reynolds Tobacco Company. The Santa Fe segment consists of the domestic operations of Santa Fe Natural Tobacco Company, Inc (SFNTC).
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