Christopher Growe of Stifel commented on Tuesday that U.S. tobacco volumes are likely to show less of a decline in 2015, pricing is set to accelerate resulting in tobacco companies benefiting from earnings per share growth.
Growe estimates tobacco companies will see 9 percent EPS growth with upside potential in 2015 while strong cash flow generation, a hallmark of the industry, is estimated to grow by 8 percent and match net income growth.
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Looking forward to 2015, Growe expects an uptick in regularity activity and will also feature progress on deeming regulations, menthol regulation and substantial equivalence. The analyst also expects more MRTP (Modified Risk Tobacco Product) applications with the first application in place in late 2014.
Growe maintains a Buy rating on Altria Group Inc (NYSE: MO) and Hold ratings on both Reynolds American, Inc. (NYSE: RAI) and Lorillard Inc. (NYSE: LO).
Growe also maintained a Buy rating on Philip Morris International Inc. (NYSE: PM), an international-themed investment.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.