(Forbes) - Altria entered the wine business with the acquisition of UST Inc. in January 2009. UST’s principal subsidiaries included U.S. Smokeless Tobacco Company and International Wine & Spirits Ltd. Altria primarily acquired UST for its smokeless tobacco portfolio, as it wanted to partially insulate itself from the growing migration of smokers toward smoke-free tobacco consumption. However, it continues to operate the wine business to this day. Here, we take a look at the key revenue drivers impacting the business that contributes just around 2% to Altria’s total value by our estimates.

Our $41 price estimate for Altria is almost 10% above its current market price.

Sales Volume: Altria sold 7.97 million 9-litre cases of wine last year. Its sales volumes have grown at more than 7.3% CAGR since 2009. This compares to growth of around 3.6% CAGR in total wine consumption in the U.S. over the same period. As a result, Ste. Michelle Wine Estates, Altria’s subsidiary that controls its wine business, has been able to grow its volume share in the U.S. wine market from 1.9% in 2009 to 2.2% in 2013. The market share gain can be primarily attributed to growth in the distribution network and performance of its 14 Hands brand over the past few years. 14 Hands has been one of the fastest growing wine brands in the U.S. Last year, its sales volume grew by more than 34%, compared to growth of just 2.7% in the total U.S. wine market.