Morgan Stanley Maintains Equal-Weight, PT of $105 on Lorillard

Morgan Stanley reiterates its Equal-weight rating and price target of $105 per share on Lorillard Inc. LO on a less attractive risk-reward ratio following recent outperformance. Morgan Stanley says, “Menthol uncertainty persists, limiting ability to trade at premium to peers. …Lorillard has significantly re-rated following March 2011 TPSAC report, providing more balanced risk-reward. …We believe the market is not currently focused on residual uncertainty surrounding the FDA's menthol review. …Fundamentals remain best-in-class, and Newport provides exceptional pricing power and brand loyalty.” LO closed at 110.72 per share on Tuesday.