Salomon Smith Barney upgraded its investment rating on shares of UST Inc. (UST) to buy from outperform.
Analyst Martin Feldman says that while UST is trading close to its 52-week high, he now thinks it may appreciate to $41 or higher over the next 12 months. In essence, he continues to expect 2002 net income and EPS to grow by 7.3% and 4.5%, respectively; and sees $3.10 2002 EPS. In 2003, Feldman sees substantial opportunity for the company to enhance returns to shareholders due to better operating fundamentals, and a high possibility that the Conwood litigation is resolved. Feldman raised his $3.25 2003 EPS forecast to $3.34 on the belief that UST, in 2003, will reinitiate its buyback program regardless of the outcome of its appeal to the Sixth Circuit Court of Appeals in the Conwood case.