Altria Group Downgraded To Neutral From Overweight At Piper Jaffray

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Piper Jaffray analyst Michael Lavery downgraded Altria Group (MO) to Neutral from Overweight and lowered his price target for the shares to $49 from $64.

Following discussions between Altria and Philip Morris (PM) of a potential merger of equals, the analyst has less confidence in Altria's outlook. The analyst says any interest in a deal without a premium could suggest more stress on the underlying fundamentals and management's outlook for the future than he had appreciated. 

Further, the analyst adds that while potential earnings from the Juul stake may be underappreciated, he's also less confident on Altria's approval from the FTC and FDA.

He prefers more clarity from regulators before getting more bullish on the vapor outlook. 

Disclosure: None.

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