Citi remains bullish on Imperial Brands (LON:IMB) despite what they reckon is a ‘disappointing’ set of results, Sharecast has reported. The comments came after the company updated investors on its performance this week, revealing a fall in tobacco volumes for the half year ended March 31, while also posting a rise in net revenue.
Imperial Brands’ share price has been subdued in London in today’s session, having given up 0.66 percent to 2,212.50p as of 09:55 BST. The group’s shares are underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.64 percent higher at 7,253.65 points.
Citi still bullish on Imperial Brands
Citi reaffirmed Imperial Brands as a ‘buy’ yesterday, following the company’s latest update. Sharecast quoted the broker’s analysts Adam Spielman, Ravi Sharma and Anna Frontani as commenting that the stock market overreacted to the figures and, changing hands on less than eight times’ his estimates for calendar year 2019 profits, the shares were ‘too cheap’.
They, however, cut their forecasts for the company’s sales of next generation products in fiscal years 2019 and 2020 to £350 million and £480 million, respectively.
“Clearly we’re disappointed by the share price since our upgrade, but the basic argument remains: Imperial is in a better place than it used to be, and as such we think the shares are too cheap,” Citi pointed out. “That said, we think the company’s credibility is reduced and it’s likely to take several quarters to recover. We can’t see a near-term catalyst.”
Other analysts on FTSE 100 group
JPMorgan Chase & Co reaffirmed the tobacco group as ‘neutral’ this week, with a target of 2,900p on the Imperial Brands share price. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average price target of 3,054.29p.