Imperial Brands share price: Analysts flag worries over group’s dividend

on Nov 8, 2017
Updated: Mar 11, 2020

Hargreaves Lansdown is concerned over Imperial Brands’ (LON:IMB) dividend, the analysts have said. The comments came after the tobacco group updated investors on its full-year performance, lifting its payout to shareholders by 10 percent.

Imperial Brands’ share price rose in the previous session, adding 0.49 percent to 3,100.00p, outperforming the broader UK market, with the benchmark FTSE 100 index closing in negative territory. Despite yesterday’s rise, the tobacco group’s shares remain more than 18 percent down over the past year.

Dividend worries

Citywire reported yesterday that Hargreaves Lansdown was concerned with Imperial’s dividend after the tobacco giant posted a rise in profits at actual rates, but unveiled a drop at constant exchange rates. At the same time, the FTSE 100 group hiked its dividend per share.

“The first thing we do on opening a set of Imperial results is hit ‘Ctrl+F’ and type in ‘medium term’,” the broker’s analyst Nicholas Hyett commented, as quoted by the newswire. “That’s a reflection of the importance of Imperial’s dividend policy to investors, and also a niggling worry that at some point one of the most generous dividend policies in the market has to come to an end.”

He further noted that the FTSE 100 group’s commitment to growing the dividend 10 percent a year over the medium term was ‘legendary’.

Other analysts on Imperial Brands

The 17 analysts offering 12-month price targets for Imperial Brands for the Financial Times have a median target of 3,770.00p on the shares, with a high estimate of 4,600.00p and a low estimate of 3,230.00p. As of yesterday, the consensus forecast amongst 19 polled investment analysts covering the tobacco manufacturer has it that the company will outperform the market.