Berenberg has lowered its valuation on Imperial Brands (LON:IMB), following the collapse into administration of P&H, the UK’s second largest tobacco wholesaler. The analysts, however, retained their bullish stance on the blue-chip tobacco maker.
Imperial Brands’ share price has slipped lower in today’s session, having given up 0.60 percent to 3,049.00p as of 10:06 GMT, marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.19 percent lower at 7,481.92 points. The group’s shares have lost more than 12 percent of their value over the past year, as compared with an over eight-percent gain in the Footsie.
Berenberg trims valuation
Berenberg lowered its valuation on Imperial Brands from 3,780p to 3,765p today, while maintaining its ‘buy’ rating on the shares.
“As the banks have first rights over the cash derived from trade debtors, Imperial Tobacco and Japan Tobacco are left to pay the outstanding duty on the tobacco products that P&H had sold,” the broker’s analyst Jonathan Leinster said, as quoted by Citywire, pointing to a cost of up to £160 million for the group.
“These figures might reduce somewhat, because the companies will be able to reclaim on any unsold stock,” he added.
The comments come after Imperial Brands updated the market on its full-year performance last month, posting a rise in revenues, and unveiling plans to step up its activities in its next generation products.
Other analysts on Imperial Brands
The 16 analysts offering 12-month price targets for Imperial Brands for the Financial Times have a median target of 3,600.00p on the shares, with a high estimate of 4,600.00p and a low estimate of 3,275.00p. As of December 13, the consensus forecast amongst 19 polled investment analysts covering the tobacco manufacturer has it that the company will outperform the market.