Morgan Stanley Reiterates Equal-Weight on Lorillard

Morgan Stanley reiterated its Equal-weight rating on Lorillard LO. In a research report published today, Morgan Stanley stressed that Lorillard's near-term risk-reward remains relatively unattractive. In the report, Morgan Stanley named the reasons as, "First, we have received little client “pushback” regarding our concern surrounding the pending revisions to the TPSAC menthol report. Second, ... we do not believe that FDA's indication that there would be no substantive changes to the menthol report once submitted carries any substantive or legal weight (e.g., we believe that TPSAC can alter its report). Third, although the recently peer-reviewed FDA menthol reports are more benign than TPSAC's report, they are actually very modestly more anti-menthol in their conclusions – in our view – than the initially discussed non peer-reviewed versions. Fourth, we do not believe that the report is being amended to reflect the favorable Vanderbilt menthol study." At the moment, Morgan Stanley has a price target of $105 placed on the company's stock. On Wednesday, Lorillard added 2.31% to its value to close the day at $99.45. Its shares continued to climb higher in today's pre-market trading, however, rising 0.15% to $99.60.