E-cigarette company Juul Labs is looking for funding to finance its potential bankruptcy process, Bloomberg reported. Though the company has not confirmed the news, rumors are abuzz that it would soon apply for bankruptcy after the U.S. Food and Drug Administration issued an MDO (Marketing Denial Order) in June for Juul products in the domestic market.
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Last week, Altria (NYSE:MO), which invested $12.8 billion in 2018 to pick up a 35% stake in Juul Labs, ended its non-compete deal with the company.
In an SEC filing, Altria announced that the company is exercising its option to release itself from the Juul non-competition obligations. The tobacco giant agreed to certain non-competition obligations when it picked up a stake in Juul Labs. However, it also obtained an option to end the non-competition obligation if the carrying value of its investment in Juul drops below 10%.
Altria stated that its investment in Juul had a carrying value of $450 million on June 30, 2022, leading it to terminate the non-competition obligations permanently. Post the termination of its non-compete deal, let’s see what’s in store for Altria stock.
Is Altria Stock a Buy or Sell?
Altria stock commands a Moderate Buy consensus rating on TipRanks, based on two Buy and three Hold recommendations. Meanwhile, analysts’ average price target of $48.20 implies 13.4% upside potential.
What stands out is that hedge funds bought 1 million Altria shares last quarter. Further, TipRanks’ investors are optimistic about MO stock, and 2.5% of these investors have increased their holdings in the past month.
Altria stock is also a viable investment option for investors seeking a high dividend yield. Altria offers a stellar dividend yield of about 9% at current price levels.
Overall, Altria stock has a maximum Smart Score of “Perfect 10” on TipRanks.
