Citi Reiterates Buy On Reynolds American Inc (RAI)

Citi Investment Research is reiterating its Buy rating on Reynolds American, Inc. RAI and $79 price target. In a note to clients, Citi writes, "While RAI has been tremendously successful in pruning their portfolio (having cut 85% of their SKUs since 2004), and having returned the company to market share growth ahead of schedule, we expect more good news to come. The Camel brand is finally gaining market share again, and the brand's future looks bright, given its strong hold with adult smokers under 30. Camel's superior profit margin, coupled with the margin improvement also seen for value-priced Pall Mall, should allow RAI's cigarette segment margins to expand further from here." Shares of RAI gained 14 cents yesterday to close at $64.86.