Imperial Brands share price: Jefferies sees group as underappreciated

Analysts retain ‘buy’ recommendation on stock

Imperial Brands share price: Jefferies sees group as underappreciated

Imperial Brands’ (LON:IMB) merits are not fully appreciated, analysts at Jefferies have said. The comments came as the broker reiterated its bullish stance on the blue-chip tobacco group.

Imperial Brands’ share price lost ground in London in yesterday’s session, shedding 1.57 percent to close at 3,758.50p, underperforming the broader UK market, with the benchmark FTSE 100 index falling 33.14 points yesterday to end the session 0.46 percent lower at 7,114.36. The group’s shares have been little changed over the past year but are up by some six percent so far in 2017.

Jefferies reiterated its ‘buy’ rating on Imperial Brands yesterday, with a price target of 4,400p on the shares, noting that it expects a re-rating of the stock.

“On resuming coverage last year, we argued the merits of Imperial’s new strategy – and therefore its returns outlook – were not fully appreciated,” the broker’s analyst Owen Bennett commented, as quoted by Citywire. “This remains the case and we would expect the stock to re-rate as conviction grows. We also see an increasing probability of a take out in the near term. Even with no re-rating or bid, the stock remains attractive.”

The comments come after Imperial Brands updated investors on its performance last month, saying that it was expecting a boost to revenues and profits from favourable currency movements. On a constant currency basis, however, the blue-chip group has flagged lower revenue and profit, with a stronger second-half performance.

The 16 analysts offering 12-month price targets for Imperial Brands for the Financial Times have a median target of 4,215.00p on the shares, with a high estimate of 4,650.00p and a low estimate of 3,400.00p. As of April 14, the consensus forecast amongst 19 polled investment analysts covering the blue-chip group has it that the company will outperform the market.

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