Altria Group Upgraded by RBC

Altria Group received an investment-rating upgrade Monday from RBC Capital Markets to sector perform from underperform amid a tumble in the cigarettes maker’s shares since the Food & Drug Administration on Friday revealed a new regulatory plan for tobacco products that aims to lower nicotine levels in cigarettes.

Shares of Altria fell 9.5% Friday to $66.94 and dropped another 1.7% in recent Monday pre-market trading to $65.80. Meanwhile, RBC kept its price target on the shares at $62 each, which is now close enough to the shares’ current trading level to warrant the change in rating to sector perform from underperform. In a note to clients, RBC said “while the FDA’s announcement on Friday was a shock to investors (based on how the tobacco stocks reacted), we suspect the news was not a shock to the tobacco industry.” The firm noted “the desire to regulate nicotine levels has always been part of the FDA’s mandate since the FDA took regulatory control of the US tobacco industry in 2009,” adding “Friday’s announcement was a very clear endorsement (the first we have seen from any FDA commissioner) of the current direction most major tobacco players are taking–inves

Add Comment