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Lorillard, Inc. (LO)

- NYSE
  • Jun. 30, 2014, 6:51 AM
    • A move by Imperial Tobacco (ITYBY) to sell off 30% of its holdings in Compania de Distribucion Integral Logista Holdings SA could make it easier for tobacco giants Lorillard (LO) and Reynolds American (RAI) to merge.
    • Imperial Tobacco would sit with close to $800M in extra cash if it unloaded the piece in its Madrid unit.
    • Shares of both Lorillard and Reynolds are up over 20% since merger talk ramped up a few months ago.
    | 1 Comment
  • Jun. 24, 2014, 9:47 AM
    • Lorillard (LO -1.9%) trades lower after Morgan Stanley downgrades the company to an Underweight rating.
    • The investment firm thinks the takeover premium on Lorillard has outrun itself to offer investors very little upside.
    • There's also some caution issued on the risk of the menthol-heavy Newport brand.
    • What to watch: Look for a defense from Wells Fargo analyst Bonnie Herzog who is far out on the Lorillard limb.
    | 6 Comments
  • Jun. 24, 2014, 3:51 AM
    • The $96B tobacco bond market is continuing its decline, as most Americans have quit smoking at a faster rate than estimated when most of the bonds were sold in previous decades. Health risks, public smoking bans, e-cigs and new excise taxes have all been factors in the decrease.
    • A forecast last month from Moody's Investors Service estimates 65-80% of tobacco bonds are headed toward default, and many analysts predict the default to occur by the end of the decade.
    • Cigarette consumption fell an annual average of 3.4% since 2000, while many bonds were set up to only withstand drops of 2-3%. E-cigarettes have also diminished market share, with sales growing by more than $2.2B in the last four years.
    • Related tickers: (MO) (BTI) (LO) (PM) (ECIG) (VAPE) (HPNN) (MCIG) (NTRR) (VAPR) (VPCO) (RAI) (AHII)
    | 23 Comments
  • Jun. 18, 2014, 9:02 AM
    • Wells Fargo analyst Bonnie Herzog is fairly confident (90%) that a deal in which Reynolds American (RAI) pays up to $80 per share for Lorillard (LO) is still likely (CNBC interview video).
    • Herzog thinks a combination of the two companies will "catapult" the e-cigarette business.
    • LO +2.0% premarket to $63.01 giving investors plenty of upside still if the Wells call is correct.
    | 3 Comments
  • Jun. 18, 2014, 7:14 AM
    • Sales of e-cigarettes rose 72% over the last 52 weeks, according to data compiled by Bloomberg.
    • Lorillard (LO) holds a formidable 40% share of the market with its Blue eCigs brand a powerhouse.
    • R.J. Reynolds American (RAI) and Altria (MO) are playing catch-up with new brands rolling out this year.
    • Early reviews of e-cigs by regulators have left plenty of channels for marketing and distribution for the growing industry.
    | 5 Comments
  • Jun. 18, 2014, 7:00 AM
    • The tobacco industry continues to challenge the necessity of new European Union rules which require governments to impose supply chain tracking on manufacturers.
    • The group thinks its current track and trace system can be adapted, instead of adopting costly third-party solutions.
    • One goal of an industry-wide tracking system is to cut down on the illegal trade of cigarettes.
    • Related stocks: RAI, LO, MO, PM, BTI, ITYBY, ITYBF
    | 3 Comments
  • Jun. 11, 2014, 2:51 AM
    • Seven U.S. senators have urged the Department of Transportation to finally ban the use of electronic cigarettes on domestic flights and those to or from the United States. The ban for "vaping" on U.S. flights was proposed in September 2011.
    • Although many airlines have prohibited the use of e-cigarettes, federal law still allows them to be used during flights.
    • Related tickers: (MO) (BTI) (LO) (PM) (ECIG) (VAPE) (HPNN) (MCIG) (NTRR) (VAPR) (VPCO) (RAI) (AHII)
    | 15 Comments
  • May 30, 2014, 8:38 AM
    • Big Tobacco (LO, RAI, MO) will dominate the e-cigarette business due to its resources and established distribution network, according to RBC Capital Markets analys Nik Modi.
    • A merger between Lorillard and Reynolds American would only heighten the advantage of the majors over smaller players (ECIG, MCIG, AHII), reasons the investment firm.
    | 47 Comments
  • May 22, 2014, 10:36 AM
    • Shares of Lorillard (LO -5.5%) retreat after reality sets in that a deal for the company to be purchased by Reynolds American (RAI -1.8%) is complicated and could take some time to work out. The third wheel in the merger mix is British American Tobacco (BTI -0.9%) which owns 42% of Reynolds and could make a play for the whole company after a standstill agreement expires in July.
    • Analysis is divided on if a deal will end up being completed at all. Stifel thinks regulators will jump in over the dominance in menthol a combination of the tobacco companies would create - while Wells Fargo's read is much more optimistic.
    • Vector Group (VGR -1.6%) has been taken for a ride along with Lorillard and Reynolds, popping yesterday and deflating today.
    | 5 Comments
  • May 21, 2014, 3:57 PM
    • Reynolds American (RAI +4.3%) and Lorillard (LO +9.9%) are in advanced talks on a merger, according to new reports.
    • There has been much discussion over the last two months on a combination of the two tobacco giants with Wells Fargo rating the chance of a deal at 80%.
    • Both stocks have spiked late in the day off the latest development.
    | 14 Comments
  • May 20, 2014, 9:01 AM
    • British researchers find that e-cig users have a 60% higher success rate in quitting than those who use smoking cessation products like patches or gum or willpower alone. In a five-year study of almost 6,000 smokers, almost 20% of those who switched to e-cigs stopped smoking conventional fags. Only ~10% of those using patches or gum managed to quit. Slightly more than 15% quit using their willpower.
    • The long-term effects of vaping are unknown at present but they appear to be less bad than tobacco.
    • Related tickers: (MO) (BTI) (LO) (PM) (ECIG) (VAPE) (HPNN) (MCIG) (MWIP) (NTRR) (VAPR) (VPCO)
    | 15 Comments
  • May 16, 2014, 2:06 PM
    • The Minnesota Legislature passes a bill restricting the use and sale of electronic cigarettes. It now heads to Governor Mark Dayton's desk for his signature.
    • The bill requires child-proof packaging for all e-cig liquids, prohibits their use in schools, prohibits their sale from mall kiosks and requires them to be kept behind the counter in stores. The law allows local governments to pass more stringent restrictions and ensures penalties for those who sell e-cigs to minors.
    • E-cig use is also banned in hospitals, healthcare clinics, doctors' offices, most government buildings, all facilities owned by the University of MN or MN State Colleges and Universities, including dorm rooms and licensed daycare facilities, including home daycare during operating hours.
    • The bill is a watered down version of an earlier bill that would have treated e-cigs the same way as conventional cigarettes.
    • Related tickers: (MO) (BTI) (LO) (PM) (ECIG) (VAPE) (HPNN) (MCIG) (MWIP) (NTRR)
    | 20 Comments
  • May 15, 2014, 3:02 PM
    • Lorillard, Inc. (LO) declares $0.615/share quarterly dividend, in line with previous.
    • Forward yield 4.34%
    • Payable June 10; for shareholders of record May 30; ex-div May 28.
    | 3 Comments
  • May 13, 2014, 7:29 PM
    • U.S. exchanges are now unified in canceling some wild trades in (AOL -3.1%) in a two-minute span just 10 minutes before the close.
    • The odd trades, traced to a trading firm's mistake, also affected dealing in Nabors (NBR), Lorillard (LO -1.3%), Marathon Petroleum (MPC -0.3%), Canadian Natural Resources (CNQ +0.3%), Nasdaq OMX (NDAQ -0.9%) and Caterpillar (CAT +0.9%), among others -- but those trades will be left standing.
    • The NYSE will bust AOL trades of $33.17 or below, while Nasdaq, Direct Edge and NYSE Arca will cancel those at $33.16 and below.
    | 13 Comments
  • May 13, 2014, 5:45 PM
    • Investors betting on a potential deal between Reynolds American (RAI) and Lorillard (LO) might want to change their thinking: That appears to be the message of RAI CEO Susan Cameron, who downplayed such speculation today at a Goldman Sachs investor conference.
    • The CEO also swatted down talk that British American Tobacco might raise its 42% stake in RAI after a 10-year standstill agreement preventing a hostile takeover expires in July, saying "I don’t see BAT as a stealth predator. I see them as a partner."
    • Cameron also said investors shouldn’t speculate that her sudden, surprise return to the RAI helm after leaving three years ago means a deal is more likely; predecessor Dean Delen decided to retire a bit sooner than planned strictly for family reasons, prompting the board to ask her to take over again.
    | 6 Comments
  • May 12, 2014, 9:55 AM
    • British American Tobacco (BTI) has hired bankers to advise it on a potential acquisition in the U.S., according to The Times.
    • U.S. firms are a step ahead of BAT in some growth channels including e-cigarettes.
    • Shares of Reynolds American (RAI +3%) and Lorillard (LO +1.9%) are both higher on the day off the development.
    • Potential consolidation in the tobacco industry has been a hot topic over the last month and has already helped to prop up share price in the group.
    | 5 Comments
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Company Description
Lorillard Inc is engaged in the manufacture of cigarettes and tobacco in the United States. The Company's principal products are marketed under the brand names of Newport, Kent, True, Maverick and Old Gold with sales in the United States of America.
Industry: Cigarettes
Country: United States