What’s Propelling Reynolds American, Inc. to Increase So Much?

 What's Propelling Reynolds American, Inc. to Increase So Much?

In today’s session Reynolds American, Inc. (RAI) registered an unusually high (2,365) contracts volume of call trades. Someone, most probably a professional was a very active buyer of the December, 2016 call, expecting serious RAI increase. With 2,365 contracts traded and 35554 open interest for the Dec, 16 contract, it seems this is a quite bullish bet. The option with symbol: RAI161216C00055000 closed last at: $0.75 or 11.8% down. About 1.53M shares traded hands. Reynolds American, Inc. (NYSE:RAI) has risen 14.69% since April 21, 2016 and is uptrending. It has outperformed by 9.36% the S&P500.

Analysts await Reynolds American, Inc. (NYSE:RAI) to report earnings on February, 9. They expect $0.60 EPS, up 25.00% or $0.12 from last year’s $0.48 per share. RAI’s profit will be $861.14 million for 22.61 P/E if the $0.60 EPS becomes a reality. After $0.61 actual EPS reported by Reynolds American, Inc. for the previous quarter, Wall Street now forecasts -1.64% negative EPS growth.

Reynolds American, Inc. (NYSE:RAI) Ratings Coverage

Out of 13 analysts covering Reynolds American Inc. (NYSE:RAI), 8 rate it a “Buy”, 2 “Sell”, while 3 “Hold”. This means 62% are positive. $92 is the highest target while $44 is the lowest. The $52.60 average target is -3.08% below today’s ($54.27) stock price. Reynolds American Inc. has been the topic of 24 analyst reports since July 29, 2015 according to StockzIntelligence Inc. The firm has “Neutral” rating by UBS given on Thursday, August 25. The firm has “Hold” rating given on Tuesday, June 14 by Berenberg. Jefferies initiated it with “Buy” rating and $61 target price in Wednesday, September 21 report. The stock has “Underperform” rating given by CLSA on Wednesday, October 21. The company was downgraded on Monday, September 12 by Goldman Sachs. The stock has “Buy” rating given by Zacks on Friday, August 21. Morgan Stanley maintained Reynolds American, Inc. (NYSE:RAI) on Wednesday, October 28 with “Equal-Weight” rating. Barclays Capital maintained Reynolds American, Inc. (NYSE:RAI) on Wednesday, September 30 with “Overweight” rating. The stock has “Buy” rating given by Zacks on Friday, August 14. The rating was upgraded by S&P Research to “Strong Buy” on Wednesday, July 29.

According to Zacks Investment Research, “Reynolds American Inc. is the parent company of R.J. Reynolds Tobacco Company, Santa Fe Natural Tobacco Company, Inc., Lane Limited and R.J. Reynolds Global Products, Inc. R.J. Reynolds Tobacco Company, the second- largest U.S. tobacco company, manufactures about one of every three cigarettes sold in the United States, including five of the nation’s 10 best-selling brands: Camel, Winston, KOOL, Salem and Doral. Santa Fe Natural Tobacco Company, Inc. manufactures Natural American Spirit cigarettes.”

Insitutional Activity: The institutional sentiment decreased to 0.89 in Q2 2016. Its down 0.26, from 1.15 in 2016Q1. The ratio dropped, as 44 funds sold all Reynolds American, Inc. shares owned while 247 reduced positions. 55 funds bought stakes while 280 increased positions. They now own 644.47 million shares or 0.10% more from 643.79 million shares in 2016Q1.
Frontier Investment Mgmt has 0.75% invested in the company for 111,331 shares. Churchill Management Corp owns 521,647 shares or 1.84% of their US portfolio. Sumitomo Mitsui Trust holds 0.24% or 2.59 million shares in its portfolio. Brown Advisory Inc holds 0.02% or 88,660 shares in its portfolio. Integrated Wealth Counsel Ltd Llc reported 260 shares or 0.03% of all its holdings. Mackenzie Corporation has invested 0.01% of its portfolio in Reynolds American, Inc. (NYSE:RAI). Bnp Paribas Arbitrage holds 1.32 million shares or 0.32% of its portfolio. Lpl Ltd Liability Co holds 0.02% or 46,009 shares in its portfolio. Intact Inv Mngmt Inc holds 61,000 shares or 0.13% of its portfolio. Brookstone Capital Management holds 0.04% or 6,023 shares in its portfolio. Athena Advisors reported 231,488 shares or 4.09% of all its holdings. First In has invested 0.11% of its portfolio in Reynolds American, Inc. (NYSE:RAI). Janus Capital Management has 0.4% invested in the company for 8.76M shares. Raymond James Trust Na holds 0.5% of its portfolio in Reynolds American, Inc. (NYSE:RAI) for 109,494 shares. Guggenheim Capital Ltd Limited Liability Company reported 1.67 million shares or 0.28% of all its holdings.

Insider Transactions: Since September 28, 2016, the stock had 0 insider buys, and 2 selling transactions for $32.31 million net activity. $31.72 million worth of Reynolds American, Inc. (NYSE:RAI) was sold by British American Tobacco p.l.c.. Crew Debra Ann also sold $589,964 worth of Reynolds American, Inc. (NYSE:RAI) on Wednesday, October 26.

Reynolds American Inc. is a holding company. The company has a market cap of $77.89 billion. The Company’s divisions are RJR Tobacco, Santa Fe and American Snuff. It has a 14.12 P/E ratio. The RJR Tobacco segment consists principally of the primary activities of R.

RAI Company Profile

Reynolds American Inc. (RAI), incorporated on January 2, 2004, is a holding company. The Company’s divisions are RJR Tobacco, Santa Fe and American Snuff. The RJR Tobacco segment consists principally of the primary activities of R. J. Reynolds Tobacco Company. The Santa Fe segment consists of the domestic activities of Santa Fe Natural Tobacco Company, Inc. (SFNTC). The American Snuff segment consists of the primary activities of American Snuff Company, LLC (American Snuff Co.). The Company’s operating subsidiaries include R. J. Reynolds Tobacco Company, SFNTC, American Snuff Co., R. J. Reynolds Vapor Company (RJR Vapor), Niconovum USA, Inc. and Niconovum AB.

More important recent Reynolds American, Inc. (NYSE:RAI) news were published by: Reuters.com which released: “Reynolds American rejects BAT’s $47 billion takeover offer: source” on November 14, 2016, also Journalnow.com published article titled: “Reynolds American Inc. picks advisers to review offer”, Fool.com published: “Why Reynolds American, Inc. Stock Jumped 17% in October” on November 06, 2016. More interesting news about Reynolds American, Inc. (NYSE:RAI) was released by: Forbes.com and their article: “Reynolds American Reaches Analyst Target Price” with publication date: November 09, 2016.

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