Altria's planned split into separate U.S. and international tobacco companies will lift the company's stock even though investors' reaction has been only lukewarm, financial newspaper Barron's said in its September 17 edition.
Altria stock could rally to $87 in 12 to 18 months from the current $67 based on share buybacks and costs cutting, Barron's said.
The split, planned for next March, will create two dominant tobacco companies with differing strategies, and likely lead to large share repurchases, substantial cost saving, better pricing and stronger business execution, Barron's said.
Altria has a strong balance sheet with only $1 billion in net debt and annual pretax cash flow of $15 billion, and it could repurchase $10 billion of stock within 18 months.
Closing its New York headquarters could save the company $250 million a year, and its total costs could be reduced by $500 million to $1 billion.
(Reporting by Matt Daily)