Altria Group Inc (MO: NYE), the parent company of Philip Morris USA, announced today plans to sell $2.2 billion worth of its shares in Anheuser-Busch InBev (BUD: NYE).
Is Altria’s Divestment a Strategic Move for Growth?
Altria says the proceeds from the sale will be used to invest in its core tobacco business and for share repurchases. The proceeds from the sell-off will be reinvested into reinforcing the core business and share repurchases – potentially leading to higher dividends or buyback programs for its shareholders. The sale, which is expected to close in the second quarter of 2024, will reduce Altria’s ownership stake in AB InBev from approximately 10.5% to 8.0%.
Stock Target Advisor’s View on Altria Stock:
Stock Target Advisor’s assessment of Altria Group offers a ‘Buy’ rating with a target price of $56, representing a projected 12-month price change of 29.18%. This target price significantly surpasses the average analyst target price of $45.55, which carries a neutral ‘Hold’ rating.
As of the recent stock price, Altria Group trades at $43.35, experiencing a 1.90% increase over the past week, and a beneficial 3.12% increase over the past month, but still suffers from a negative 7.51% performance year-over-year.
A collective of 05 analysts offer their take on Altria’s market performance. Their consensus leans towards a ‘Hold’ rating with a target price of $45.55, with a range spanning $36.1 to $56.
On the industry level, Altria operates in a “Tobacco” sector that enjoys positive market sentiment. The average analyst rating for this sector is a ‘Strong Buy’, even while Stock Target Advisor maintains a ‘Neutral’ stance.
Conclusion:
Altria Group’s strategic decision to divest from Anheuser-Busch InBev comes as a pivotal move to sharpen focus on its core tobacco business. Investors must weigh this transition carefully!
