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Lorillard, Inc. (LO)

Zacks Equity Research

Lorillard Inc.'s (LO) fourth-quarter and fiscal 2011 earnings exceeded both the Zacks Consensus Estimate by 12.2% and 3.0%, and the prior-year earnings by 26.4% and 16.2%, respectively. The company's results continued to outperform in terms of volume and retail shipments, despite a difficult macro-economic environment.

Sales also increased on the back of higher unit sales volume and higher average prices, partially offset by higher sales promotion costs, which were primarily driven by the introduction of Newport Non-Menthol. The company also remains committed to returning cash to shareholders through both share repurchases and dividends.

Our six-month target price of $155.00 per share equates to about 17.4x of earnings estimate for 2012. With annual cash dividend of $5.20, the target price implies the expected total return of 22.1% over that period.

LORILLARD CO (LO): Free Stock Analysis Report

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