CHICAGO, Dec. 17, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include theAltria Company (NYSE:MO-Free Report), Reynolds American Inc. (NYSE:RAI-Free Report), Lorillard Inc. (NYSE:LO-Free Report), Philip Morris International (NYSE:PM-Free Report) and The Boeing Company (NYSE:BA-Free Report).
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Here are highlights from Monday's Analyst Blog:
E-cigs Receive Unfavorable French Ruling
Cigarette makers recently facing dwindling volumes have been dealt yet another blow with the ruling of a court in France. As per media reports, the decree has stated that e-cigarettes can be sold only by tobacconists (expert tobacco dealers). The ruling also states that these cigarettes belong to the same category as tobacco products, and, therefore, the advertising bans on cigarettes will be applicable for them as well.
E-cigarettes are becoming increasingly popular especially among youngsters. These battery-powered devices turn a nicotine-based liquid into vapor. They were considered less harmful than tobacco products and therefore the major tobacco players capitalized on them.
Altria Company's (NYSE:MO-Free Report) subsidiary, Nu Mark LLC, introduced its first e-cigarette brand — MarkTen e-cigarettes — in Indiana in August. Reynolds American Inc.'s (NYSE:RAI-Free Report) subsidiary, R.J. Reynolds Vapor Company, is expanding the distribution network of its tailor-made e-cigarette — Vuse. Lorillard Inc. (NYSE:LO-Free Report) captured a leading position in the electronic cigarette industry in the U.S. after it acquired e-cigarette brand blu e-Cigs in Apr 2012. Also, in November, Philip Morris International (NYSE:PM-Free Report) announced its plans to foray into the e-cigarette business.
The verdict could have great influence on other government bodies that are still undecided on whether to levy the same regulations on the e-cigarette category as the tobacco products. The U.S. Food and Drug Administration plans to set marketing and product regulations for e-cigarettes in the near future as there is not much scientific evidence to back their ability to help smokers quit or smoke less. European legislators are expected to frame regulations for e-cigarettes, based on the risks or benefits on smokers' health which is a burning topic in the subcontinent.
Moreover, the cigarette makers are facing tough industrial conditions amid strong anti-smoking campaigns worldwide, where governments are imposing restrictions on tobacco companies which, in turn, are leading to a decline in cigarette consumption. In such a condition, the ruling against e-cigarettes will be detrimental to the margins of the tobacco biggies in the coming quarter.
Boeing Expanding in South Carolina
One of the largest commercial airliner manufacturers The Boeing Company (NYSE:BA-Free Report) decided to expand its existing South Carolina Facility. The expansion of the existing facility will allow the company to churn out its 787 Dreamliner at a much faster pace.
Boeing will begin construction of a new paint facility in its existing North Charleston, S.C. campus in the second half of 2014. The goal is to get the fully assembled 787 Dreamliners painted in South Carolina from mid 2016.
At present, after a Boeing Dreamliner is assembled in its South Carolina facility, it is flown to Fort Worth, Texas, for final paint and then flown back to South Carolina for customer delivery. This unnecessarily delays the delivery of the aircraft to the customers.
The 787 Dreamliner is a popular variant well accepted by the airline industry for its fuel efficiency and comfort. Though plagued by delays and technical glitches, the Dreamliner hardly witnessed any slowdown in demand. As of Nov 2013, Boeing received 1,012 orders for the Dreamliner with only 103 delivered since its launch.
Year to date the company received orders for 182' 787. To cope with the brisk demand, the company needs to spur the production rate. This new 230,000 square foot paint facility will do precisely that.
Boeing also decided to add another 468 acres (189 hectares) in North Charleston, S.C. through a long-term lease. The company will take the lease from Palmetto Railways, a division of the S.C. Department of Commerce. The company has an option to purchase all of the 468 acres (189 hectares) at the end of the initial lease term at 2027 end. This move will take care of any future expansion plan of the company.
Apart from its presence in the commercial airline sector, Boeing has a large exposure in the defense sector. Boeing currently has a Zacks Rank #2 (Buy).
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