Zacks pointed out this morning that the new label is “already being questioned in a federal lawsuit filed by some of the major tobacco companies.” It noted, Reynolds American Inc. (NYSE: RAI) and Lorillard Inc. (NYSE: LO), are arguing that these warnings are far more prevalent than the brand names on each pack of smokes. It also said, “All the tobacco giants are experiencing the pressure of the new ruling of FDA.”
Reynolds American and Lorillard have Zacks #2 Rank, which translate to a short-term ‘Buy’ ratings; Philip Morris holds a Zacks #3 Rank, effectively a short-term ‘Hold’ rating. Earlier this month came a report from Morgan Stanley, where it cut Lorillard’s rating to Equal-Weight and raised Reynolds to Equal-weight.
JON C. OGG
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