Tobacco.org

Tough for Reynolds to Catch Fire 

We keep our Hold recommendation on cigarette maker Reynolds American, Inc. (NYSE: RAI), as even though cost savings measures and the new brand portfolio strategy contribute to earnings, continued volume declines, additional debt from the Conwood acquisition, and the class-action status of the Light cigarette suit warrant caution. The company posted weaker-than-expected first-quarter profit and cut its 2008 outlook, citing the challenging economic environment.

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