Imperial Tobacco Shares Fall as it Fails to Innovate

Analysts believe the fall in share price over the past six months is largely linked to its absence from the heated tobacco category, lagging behind competitors

Philip Gorham 14 August, 2017 | 11:09AM

Imperial Brands (IMB) generates the highest operating margins among the large-cap tobacco manufacturers – but that does not mean the outlook is all positive.

We forecast a 10% dividend-growth rate until 2020

Morningstar analysts are mindful of the firm's weaker volume trends, slightly lower quality brands, and the fact that it has yet to enter the promising heated tobacco market. Nevertheless, we believe Imperial's pricing power, largely driven by the addictive nature of the product, give it a competitive advantage, and rate it as having a wide economic moat.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
British American Tobacco PLC2,710.50 GBX-2.50
Imperial Brands PLC1,500.81 GBX0.22
Philip Morris International Inc76.34 USD-0.51

About Author

Philip Gorham  

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