Lorillard Inc. ($LO) Confident Investor Rating: Poor

Company name Lorillard Inc.
Stock ticker LO
Live stock price [stckqut]LO[/stckqut]
P/E compared to competitors Good


Employee productivity Good
Sales growth Poor
EPS growth Fair
P/E growth Poor
EBIT growth Poor


Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $37.63
Target stock price (averages with growth) $43.66
Target stock price (averages with no growth) $36.72
Target stock price (manual assumptions) $45.08

The following company description is from Google Finance: http://www.google.com/finance?q=lo

Lorillard, Inc. (Lorillard) is the manufacturer of cigarettes in the United States. Its Newport is a menthol flavored premium cigarette brand. During the year ended December 31, 2011, the Newport brand accounted for approximately 88.4% of its sales revenue. In addition to the Newport brand, its product line has four additional brand families marketed under the Kent, True, Maverick and Old Gold brand names. These five brands include 43 different product offerings. During 2011, it shipped 40.7 billion cigarettes, all of which were sold in the United States and certain the United States possessions and territories. Lorillard produces cigarettes for both the premium and discount segments of the domestic cigarette market. It sells its products primarily to wholesale distributors, who in turn service retail outlets, chain store organizations, and government agencies, including the United States Armed Forces. In April 2012, it acquired all of the assets of blu ecigs.


Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock. Many people will also choose to not invest in this stock due to the products that the company manufacturers. As I have explained before, this is a reasonable reason to avoid a company.

If you would like to understand how to evaluate companies like I do on this site, please read my book, The Confident Investor.

For owners of my book, “The Confident Investor” I offer the following analysis (you must be logged in to this site as a book owner in order to see the following analysis). If you have registered and cannot see the balance of this article, make sure you are logged in and refresh your browser.
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In order to assist you in using the techniques of this book, the values that I used when calculating the Manual pricing above were:

Stock price at the time of the calculation: $44.92

Growth: 0.1

Current EPS (TTM): $3.22

P/E: 14

Future EPS Calc: $5.18

Future Stock Price Calc: $72.6

Target stock price: $45.08

I hope that this makes you a better investor. [/s2If]

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