Lorillard (LO) is rallying, up more than 8% after gaining steadily throughout the session, despite a finding by the FDA's Tobacco Products Scientific Advisory Committee that the removal of menthol cigarettes from the marketplace would benefit public health. LO is one of the biggest sellers of menthol cigarettes in the U.S.
Although the panel found no difference in disease risk between smokers of menthol cigarettes and smokers of non-menthol cigarettes, the panel found that the potential for an illegal market in menthol cigarettes exists and may require further study. The panel also said menthol cigarettes were more likely to induce young people and African Americans to smoke.
It's not clear if the FDA will follow the recommendation, but FDA officials have said if the agency were to pursue such a course it "would take years." Moody's Investors Services said in a statement that it believes the outright ban of menthol-cigarette flavoring is unlikely, the WSJ reports.