Altria Focuses on RRPs Growth, Closes Investment in Cronos

奥驰亚的重点是 RRP 增长,关闭在克罗诺斯的投资

2019-03-11 20:19:12 Zacks


Altria Group, Inc. MO announced the completion of investment in the Canadian cannabis company, Cronos Group Inc. CRON. The deal, valued at $1.8 billion, will provide Altria 45% voting rights in Cronos. Moreover, the agreement entails a warrant, per which Altria can expand its ownership in the forthcoming four years. Had the warrant been brought into effect immediately, it would have augmented Altria’s ownership in Cronos to almost 55%. Exercise price of the warrant is nearly $1.0 billion. Let’s take a closer look at how this deal is likely to aid Altria.Expansion in Low Risk Tobacco Space Bodes WellWith the legalization of recreational use of marijuana in Canada, many companies are foraying into the cannabis space. In fact, companies are monitoring the health impacts of cannabis and have started viewing cannabis-infused products as another recreational option.Altria is the first tobacco player to depict interest in cannabis. The deal with Cronos is likely to augment the company’s offerings in low-risk tobacco alternatives and explore growth prospects in the nascent but booming cannabis arena. Moreover, by collaborating with Altria, Cronos is expected to attain greater resource strength, market reach as well as improve product development and commercialization capabilities.Clearly, the move resonates well with Altria’s strategy to bolster footing in the reduced risk products space. Progressing on such lines, Altria recently acquired 35% stake in JUUL Labs Inc for nearly $12.8 billion. JUUL is well-known for advanced and highly differentiated e-vapor products.Further, we note that Altria’s flagship MarkTen and Green Smoke e-vapor products are performing strongly in the smokeless category. Also, the marketing and technology sharing agreement between Altria and Philip Morris PM, which is currently under FDA review, is expected to boost business of the companies. Additionally, Altria is working on receiving FDA approval for the marketing of smokeless products with lower risk claims.Such radical efforts to strengthen the smokeless category is likely to boost the company’s performance in the forthcoming periods. Markedly, e-cigarettes and similar RRPs are viewed as the future products for tobacco companies. However, the FDA is keeping close tab on the manufacturing and marketing policies of RRPs to regulate usage among youths. Other tobacco companies such as British American Tobacco BTI are also expanding their presence in the e-cigarette’s arena. Will Efforts Offset Challenges?Declining cigarette sales volumes, stemming from fading consumer enthusiasm and regulatory hurdles, have been marring Altria’s performance for a while. During fourth-quarter 2018, domestic cigarette shipment volumes fell 4.4% year over year. Prior to this, the company’s cigarette shipment volumes declined 3.7%, 10.6% and 4.2% in the third, the second and the first quarters of 2018, respectively.With increasing vigilance on tobacco products, it is hard for the company to escape from impacts of deteriorating cigarette sales. Against such a backdrop, the company’s gradual expansion in other business areas is expected to offer respite to a certain extent. Apart from RRPs and the cannabis space becoming a game changer, higher cigarette pricing is boosting revenues. Such upsides are fueling investors’ optimism in this Zacks Rank #3 (Hold) company. Evidently, the stock gained 5.6% in the past three months compared with the industry’s increase of 9%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Top 10 Stocks for 2019In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.See Latest Stocks Today >>
奥驰亚集团宣布完成对加拿大大麻公司 Cronos Group Inc . CRON 的投资。这笔价值18亿美元的交易将为奥驰亚提供克罗诺斯45%的投票权。此外,该协议还要求获得授权,奥驰亚可以在未来四年内扩大其所有权。如果这项授权立即生效,那么奥驰亚在克罗诺斯的所有权将增加到近55%。认股权证的行使价接近10亿美元。让我们更仔细地看一下这笔交易对奥驰亚的帮助。低风险烟草空间的扩张健康随着加拿大娱乐使用大麻的合法化,许多公司正在进入大麻空间。事实上,各公司正在监测大麻对健康的影响,并已开始将注射大麻的产品视为另一种娱乐选择。奥驰亚是第一个描绘大麻兴趣的烟草玩家。与 Cronos 达成的协议可能会扩大该公司在低风险烟草替代品方面的产品,并在新兴但蓬勃发展的大麻领域探索增长前景。此外,通过与奥驰亚的合作,克罗诺斯有望获得更大的资源实力、市场影响力以及改善产品开发和商业化能力。显然,此举与奥驰亚在降低风险产品领域站稳脚跟的战略非常吻合。奥驰亚最近以近128亿美元的价格收购了 JULLabs 公司35%的股份。JUL 是著名的先进和高度分化的电子蒸汽产品。此外,我们注意到奥驰亚的旗舰产品 MarkTen 和绿色烟雾电子蒸汽产品在无烟类别中表现强劲。此外,目前正在接受 FDA 审查的奥驰亚和菲利普莫里斯公司之间的市场和技术共享协议预计将促进公司的业务。此外,奥驰亚正在努力获得 FDA 的批准,以营销低风险索赔的无烟产品。这种激进的努力,以加强无烟类别可能会提高公司的业绩,在未来的时期。值得注意的是,电子香烟和类似的 RRP 被视为烟草公司的未来产品。然而, FDA 正在密切关注 RRP 的生产和营销政策,以规范年轻人的使用。英美烟草 BTI 等其他烟草公司也在扩大在电子烟领域的影响力。 努力会抵消挑战吗?由于消费者热情下降和监管障碍,卷烟销量下滑已经让奥驰亚的表现暂时受挫。2018年第四季度,国内卷烟发货量同比下降4.4%。在此之前,2018年第三季度、第二季度和第一季度,公司卷烟装运量分别下降3.7%、10.6%和4.2%。随着对烟草产品越来越警惕,公司很难摆脱日益恶化的卷烟销售的影响。在这种背景下,预计该公司在其他业务领域的逐步扩张将在一定程度上提供喘息空间。除了 RRP 和大麻空间成为游戏规则的改变者外,更高的卷烟价格正在增加收入。这种上涨加剧了投资者对 Zacks 排名第三(控股)公司的乐观情绪。显然,过去三个月该股上涨了5.6%,而该行业的涨幅为9%。你可以看到今天的 Zacks #1排名( Strong Buy )股票的完整列表。Zacks 2019年前十大股票除了上面讨论的股票外,你想知道我们今年最好的10只股票吗?谁不会?我们的年度十强以惊人的规律性击败了市场。2018年,市场下跌-5.2%,投资组合整体得分高达两位数,个股涨幅高达+61.5%。从2012-2017年,当市场繁荣+126.3时, Zacks 的前10名达到了更令人震惊的+181.9%。见今日最新股票>>