Deutsche Bank Expects Pressure from FDA's Menthol Science Review on Lorillard

Deutsche Bank has published a research report on Lorillard LO and expects pressure from the FDA's menthol science review. In the report, Deutsche Bank writes, "Most likely scenario may be FDA recognizing concerns but deferring action, while worst-case would be any indication it is moving toward a ban, given LO's menthol dependence (95% of EBITDA). Visibility is low and LO retains solid fundamentals, but at 13.0x (2012E) the stock is not discounting much of a negative regulation scenario." Deutsche Bank maintains its Hold rating and $103 price target on Lorillard, which closed yesterday at $112.01 and is currently trading down $1.71 today since market open.