Imperial Brands share price: Analysts view stock as ‘buy’

on Feb 9, 2016
Updated: Oct 21, 2019

The Share Centre has picked Imperial Brands Plc (LON:IMB), formerly Imperial Tobacco, as its share of the week, suggesting that the stock’s defensive qualities make it attractive to investors who are looking for a relatively reliable return in a period of significant market volatility.

“Tobacco stocks in general are considered defensive compared to other sectors because sales are more consistent and generate a lot of cash for companies,” said Ian Forrest, an investment research analyst at The Share Centre. “Based on that, this week’s share of the week is international tobacco giant, Imperial Brands.”
Forrest pointed out that the tobacco giant’s products, including a range of cigarettes, e-cigarettes, tobaccos, cigars and rolling papers are being sold in 160 countries around the world. He also noted that the company remained focused on cost-cutting and that its e-cigarette brand, blu, was viewed as having excellent growth prospects. The analyst also pointed to Imperial’s impressive record of raising its dividend by an average of 10 percent for at least the last ten years.

“We recommend Imperial Brands as a ‘buy’ for medium risk income-seeking investors due to the very healthy dividend, excellent track record of dividend growth, the growing success of alternative products such as e-cigarettes and the possible revenue boost from improving US-Cuba trade relations,” Forrest concluded.
In today’s trading, Imperial Brands’shares were up 0.2 percent at 3,538.00p, as of 13:28 GMT. The stock has fallen 1.3 percent since the start of the year and the company’s market capitalisation currently stands at £33.9 billion.
The 19 analysts offering 12 month price targets for Imperial Brands have a median target of 3,900, with a high estimate of 4,400 and a low estimate of 2,700. As of February 06, 2016, the consensus forecast amongst 22 polled investment analysts covering Imperial Brands that the company will outperform the market. The same consensus estimate has been maintained since August 24, 2015, when the sentiment of investment analysts improved from “hold”.
As of 14:42 GMT, Tuesday, 09 February, Imperial Tobacco Group PLC share price is 3,499.50p.