Reynolds American shares rise after Citi upgrade

AP News
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Posted: Dec 04, 2009 12:25 PM

Shares of cigarette maker Reynolds American Inc. rose Friday after a Citigroup analyst upgraded the stock based on projections of profit and dividend growth.

Shares rose $1.90, or 3.7 percent, to $52.95 in midday trading after rising to a 52-week high of $53.37 earlier in the session.

Citigroup analyst Adam Spielman upgraded Citigroup's shares to "Buy," saying Reynolds had managed through the economic downturn and federal excise tax increased in 2009 "more successfully than we had expected."

"We believe the company will hold market share in the future, albeit with some quarterly fluctuations, thanks to Pall Mall," Spielman told investors in a research note.

The analyst raised his target price on the stock to $59.

Reynolds American, based in Winston-Salem, N.C., is the second-biggest U.S. cigarette maker after Marlboro-maker Altria Group Inc. Reynolds makes brands such as Camel, Kool, Misty, Capri and others.