What happened

Shares of Vector Group (VGR 0.08%), which makes tobacco products and invests in real estate, rose dramatically at the open of trading on March 31. The stock gained just shy of 18% in the first few minutes of trading and roughly 45 minutes into the day was still higher by around 16%. The big news was an analyst upgrade.

So what

The last news out of Vector Group was the announcement of a $0.20-per-share quarterly dividend on March 9. That was in line with the previous dividend, so nothing really notable there. Prior to that was the company's fourth-quarter 2021 earnings release on March 1, which included top-line growth of 9% year over year, with particular strength in the tobacco segment. On the bottom line the company posted adjusted earnings per share of $0.26 in the quarter, up from $0.14 in the fourth quarter of 2020. Basically, the company ended 2021 on a solid note.

A person in a convenience store.

Image source: Getty Images.

Which is likely part of the reason why, today, Barclays decided to upgrade the company's shares. The research house took the stock from equal weight to overweight. In addition, the price target was raised from $12 per share to $16. The stock rallied strongly on the news, but is still notably below the $16 figure, suggesting there's still more upside here if the analyst call is correct.

Now what

Investors tend to like it when analysts update their opinion on a stock in a positive direction. That was clearly the case here, so it's not shocking that investors jumped into the shares. That said, analysts are just as fallible as everyone else, so perhaps you shouldn't read too much into this news. But it could be a reason to take a second look at Vector Group if you were thinking about it but hadn't yet pulled the trigger. Just make sure you do your own due diligence first, noting that the tobacco angle here probably won't interest ESG investors.