Back to top

Image: Bigstock

22nd Century (XXII) Begins Strategic Review of Tobacco Assets

Read MoreHide Full Article

22nd Century Group, Inc. (XXII - Free Report) has announced the initiation of a comprehensive review process to evaluate strategic alternatives for its tobacco assets in a strategic move aimed at maximizing shareholder value. This pivotal decision comes after thorough consultation with financial and legal advisors.

The strategic alternatives being considered encompass a wide range of strategic, operational and financial options. These alternatives include potential business combinations, asset sales, licensing agreements, alternate financing strategies and various other options.

The driving force behind this strategic pivot is the belief that the current market capitalization of 22nd Century Group does not accurately reflect the true value of its assets or their long-term growth potential. Nora Sullivan, chair of the board of 22nd Century, stated, "After extensive discussion, our Board has determined that the best way to maximize value for shareholders is to comprehensively evaluate the Company's strategic alternatives."

 

Zacks Investment Research
Image Source: Zacks Investment Research

Central to the company's portfolio are its innovative VLN tobacco harm reduction products, which have received the prestigious Modified Risk Tobacco Product designation from the U.S. Food and Drug Administration. This designation underscores 22nd Century's pioneering role in the realm of combustible tobacco products that aim to reduce harm.

To guide and support the transformative endeavor, 22nd Century has engaged TD Cowen as an advisor for the review of strategic alternatives. It's important to note that while this process holds great promise, there is no assurance that it will result in any specific transaction or outcome.

As of now, the company has not established a specific timeline for the conclusion of the review process. Moreover, 22nd Century does not intend to disclose developments until its board of directors approves a specific transaction, concludes the review, or determines that further disclosure is warranted.

Wrapping Up

22nd Century Group, a leading agricultural biotechnology company, is embarking on a strategic journey to unlock the full potential of its tobacco assets. This reflects the company's steadfast commitment to delivering long-term value to its shareholders.

Shares of this Zacks Rank #3 (Hold) have plunged 88.9% in the past three months compared with the industry’s decline of 3.5%.

Bet Your Bucks on These 3 Hot Stocks

Here, we have highlighted three better-ranked stocks, namely Flowers Foods (FLO - Free Report) , Celsius Holdings (CELH - Free Report) and Walmart (WMT - Free Report) .

Flowers Foods, one of the largest producers of packaged bakery foods, currently carries a Zacks Rank #2 (Buy). FLO has a trailing four-quarter earnings surprise of 7.6%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Flowers Foods’ current financial-year sales suggests growth of 6.7% from the year-ago reported numbers. The expected EPS growth rate for three to five years is 2.3%.

Celsius Holdings, which offers functional drinks and liquid supplements, currently carries a Zacks Rank #2. CELH delivered an earnings surprise of 100% in the last reported quarter.

The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings suggests growth of 88.9% and 168.8%, respectively, from the year-ago reported numbers.

Walmart, which operates a chain of hypermarkets, discount department stores and grocery stores, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 6.6%.

The Zacks Consensus Estimate for Walmart’s current financial-year sales and earnings suggests growth of 5% and 2.1%, respectively, from the year-ago reported numbers. WMT has a trailing four-quarter earnings surprise of 11.6%, on average.

Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.

Published in