Jefferies Upgrades Vector Group to 'Hold'

Analyst Donald Trott says the upgrade is based partly on continuing evidence that company's Quest cigarette is gaining traction

Jefferies upgrades Vector Group (VGR ) to hold from underperform.

Analyst Donald Trott says the upgrade is based on continuing evidence that company's Quest cigarette (a 3-step program to nicotine-free smoking that uses genetically altered nicotine-free tobacco) is gaining traction, as well as dramatic growth in sales of its flagship discount cigarette products. He notes interest rates have also declined, thereby strengthening the appeal of a 12.1% yield provided by the company's $1.60 per share annual cash dividend.

Trott narrowed his 19-cent second-quarter loss estimate to a 2-cent loss per share, and raised his 28-cent 2003 loss per share estimate to 5 cents in EPS. He set 57-cent 2004 EPS estimate.

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