Moving Beyond Smoking - Altria Closes NJOY Buyout, Reduces FY23 Adj. EPS Outlook

  • Altria Group Inc MO completed the previously announced acquisition of NJOY Holdings, Inc.
  • The $2.75 billion buyout included an additional $500 million in cash payments, contingent upon regulatory outcomes concerning certain NJOY products.
  • Starting Q2 2023, Altria will report NJOY under "All Other" category.
  • The company expects a final payment of $1.7 billion (plus interest) from Philip Morris International Inc PM by July 15, 2023, as a part of the transition agreement for the IQOS Tobacco Heating System.
  • Altria expects the buyout to be accretive to cash flow in 2025 and adjusted EPS in 2026, with the transaction's return on invested capital expected to exceed the current weighted-average cost of capital by 2027.
  • Post-acquisition closure, the company updated its guidance for 2023 adjusted EPS to $4.89 - $5.03 (+1% to +4%) versus the consensus of $5.05 and $4.98 - $5.13 guided earlier.
  • The updated 2023 full-year EPS guidance range includes planned investments behind the U.S. commercialization of NJOY ACE.
  • The company continues to expect capital expenditures of $175 million-$225 million in 2023.
  • Also, Altria reiterated its previously authorized share repurchase program worth $1 billion by the end of 2023. 
  • Also ReadCheck Out 3 High-Yielding Dividend Stocks In Consumer Staples Sector From Wall Street's Most Accurate Analysts
  • Price Action: MO shares are trading higher by 0.65% at $44.71 on the last check Thursday.

Posted In: EquitiesMid CapNewsGuidanceBuybacksMarketsGeneralBriefs