Reynolds American Inc
) hit a new 52-week high of $46.95 on Apr 26, following solid
first quarter 2013 results on Apr 23. Its share price closed at
$46.90, recording a healthy return of 10.8% year-to-date. The
company's long-term estimated EPS growth rate is 6.70%. Average
volume of shares traded over the last three months came in at
Solid First Quarter Performance
Reynolds American posted strong first quarter earnings, which
were up 14.3% from the prior-year quarter on the back of positive
pricing, productivity improvements, prudent expense management
and a lower share count owing to share buyback program. Earnings
also beat the Zacks Consensus Estimate.
The market share of the company's popular brands including
Camel, Pall Mall, Grizzly and Natural American Spirit also
increased in the quarter. Though revenues slipped from the
prior-year quarter, operating income and margins were up due to
strict cost controls.
The company is on track with investment in smokeless and moist
snuff products to meet the changing preferences of adult tobacco
consumers. Furthermore, the company's advancement in the
e-cigarette category with its brand Vuse is encouraging. We
expect the company to gain from these investments going
For 2013, Reynolds American expects its adjusted earnings in
the range of $3.15 to $3.30 per share, up 6% to 11% from the
prior-year earnings of $2.97 per share.
Other Stocks to Consider
Reynolds American holds a Zacks Rank #2 (Buy). Another
Altria Group Inc
) also carries a Zacks Rank #2. Others stocks in the consumer
staples sector that are portraying strong upward trend in the
Flower Foods Inc
) which carries a Zacks Rank #1 (Strong Buy) and
) with a Zacks Rank #2.
FLOWERS FOODS (FLO): Free Stock Analysis
KELLOGG CO (K): Free Stock Analysis Report
ALTRIA GROUP (MO): Free Stock Analysis Report
REYNOLDS AMER (RAI): Free Stock Analysis
To read this article on Zacks.com click here.