Tobacco giant Altria (NYSE:MO) announced plans to sell a significant portion of its shares in beer company Anheuser-Busch InBev (NYSE:BUD) via a secondary offering. This move will allow Altria to cash in on its investment and boost buybacks. Looking to raise $2.2 billion from the sale, according to Bloomberg, Altria has priced the BUD shares below today’s closing price of $64.55 at $60.75 to $62.75.
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Following the transaction, which involves selling 35 million BUD shares, Altria’s stake in Anheuser-Busch InBev will decrease from approximately 10% to 8%. Anheuser-Busch has also expressed intentions to repurchase up to $200 million of its shares directly from Altria, funding this buyback with its available cash reserves.
What Is the Price Target of Altria Stock?
Turning to Wall Street, analysts have a Hold consensus rating on MO stock based on three Buys, two Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 7.5% rally in its share price since the start of the year, the average MO price target of $43.16 per share implies that the stock is fairly valued.
