Menthol Ban Leaves Tobacco Stocks Undervalued

Morningstar analysts say a fall in the share prices of Imperial Tobacco and British American Tobacco amid fears of a US ban on menthol cigarettes has boosted their appeal to investors

Philip Gorham 21 November, 2018 | 10:00AM

Tobacco stocks

Tobacco stocks such as FTSE 100 listed British American Tobacco (BATS) and Imperial (IMB) have moved sharply downward in recent days after the US Food and Drug Administration proposed a ban menthol in cigarettes, a limit on the marketing of flavours in vaping liquids, and a ban flavoured cigars.

This represents the most concerted attempt to clamp down on the tobacco industry in 20 years. But Morningstar analysts believe the stock market in pricing in a worst-case scenario for the cigarette manufacturers.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
British American Tobacco PLC2,902.50 GBX0.09
Imperial Brands PLC1,442.50 GBX2.52

About Author

Philip Gorham  

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