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Altria’s (NYSE:MO) recent moves to exit its Juul stake and purchase NJOY may mean that the likelihood of selling its stake in Anheuser-Busch InBev (BUD) may be increasing, according to analysts.
“We think the probability of a disposal is increasing – but expect any equity placing to be earnings neutral for Altria,” Citi analyst Simon Hales, who has a neutral rating and $49.50 price target on Altria (MO) wrote in a note on Monday.
The analysis comes as Altria (MO), which has a 10% stake in AB InBev (BUD), has been allowed to sell down its stake after a five year lock-up period expired in October 2021, which freed up the company to potentially divest the beer holding.
Tax expert Robert Willens told Barron’s on Tuesday that Altria’s capitol loss on the exit from its Juul stake, which was originally valued at $12.8 billion, can only be offset by capital gains. One source of capital-gain income cold be the sale of its ABI stake.
“This might be the time for Altria to finally monetize its ABI stake, which in light of the large capital loss it now has at its disposal, can be done on what amounts to a tax-free basis,” Willens told Barron’s in an email.
Altria’s (MO) Budweiser stake is valued at more than $11 billion and includes 185 million restricted shares of ABI and 12 million ordinary shares.
As of last month, Altria’s Chief Financial Officer Sal Mancuso said the company planned to keep the beer stake.
