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Imperial Brands
(OTC:IMBBY)
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Rating:69Neutral
Price Target:
$42.00
â–¼(-3.11% Downside)
Action:Downgraded
Date:05/20/26
The score is driven primarily by solid financial performance (strong margins and improving free cash flow) and supportive valuation (5.55% yield with a 12.68 P/E). These positives are tempered by higher leverage on the balance sheet and mixed technical signals (negative MACD and trading below key longer-term moving averages). Earnings-call tone is constructive with guidance reaffirmed, but near-term headwinds (one-offs and regional volume pressure) keep the score from being higher.
Positive Factors
Free cash flow & conversion
Very strong and consistent free cash flow (GBP 2.6bn over 12 months) and near-100% operating cash conversion provide durable internal funding for capex, dividends, buybacks and debt reduction, increasing resilience to regulatory or cyclical shocks over the medium term.
Negative Factors
Elevated leverage
Material leverage (debt/equity 1.54; reported leverage ~2.4x) reduces financial flexibility, raising refinancing and interest-rate sensitivity. Higher leverage constrains capital allocation optionality, increasing risk if cash flows weaken or regulatory costs rise in the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Free cash flow & conversion
Very strong and consistent free cash flow (GBP 2.6bn over 12 months) and near-100% operating cash conversion provide durable internal funding for capex, dividends, buybacks and debt reduction, increasing resilience to regulatory or cyclical shocks over the medium term.
Read all positive factors
Imperial Brands Key Performance Indicators (KPIs)
Any
Operating Profit by Segment
Shows the profitability of different business segments, highlighting which areas are driving earnings and where there might be challenges or opportunities for growth.
Shows the profitability of different business segments, highlighting which areas are driving earnings and where there might be challenges or opportunities for growth.
Data provided by:
The Fly
The FlyImperial Brands (IMBBY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$28.83B
Dividend Yield5.33%
Average Volume (3M)55.59K
Price to Earnings (P/E)13.5
Beta (1Y)-0.23
Revenue Growth10.00%
EPS Growth-25.42%
CountryUS
Employees25,100
SectorConsumer Defensive
Sector Strength42
IndustryTobacco
Share Statistics
EPS (TTM)2.14
Shares Outstanding767,157,960
10 Day Avg. Volume85,349
30 Day Avg. Volume55,585
Financial Highlights & Ratios
PEG Ratio-0.76
Price to Book (P/B)5.42
Price to Sales (P/S)0.81
P/FCF Ratio9.14
Enterprise Value/Market Cap1.11
Enterprise Value/Revenue1.64
Enterprise Value/Gross Profit4.77
Enterprise Value/Ebitda8.53
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)4.46
Revenue Forecast (FY)$13.52B
Imperial Brands Business Overview & Revenue Model
Company Description
Imperial Brands PLC, along with its various subsidiaries, operates globally, primarily focusing on the manufacturing, sourcing, marketing, and sale of tobacco and related products across continents including Europe, the Americas, Africa, Asia, and...
How the Company Makes Money
Imperial Brands makes money primarily by selling tobacco and nicotine products to distributors, wholesalers, and retailers (and in some cases directly to retail) in the markets where it operates. Its largest revenue and profit pool historically co...
Imperial Brands Earnings Call Summary
Earnings Call Date:May 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 17, 2026
Earnings Call Sentiment Positive
The call presented a broadly constructive operational and financial picture: strong cash generation (GBP 2.6bn), sustained capital returns (dividend increase and GBP 1.45bn buyback), confirmed full-year guidance, and clear progress on NGP scale, vapor/heated tobacco momentum and a GBP 320m efficiency program. These positives were partially offset by H1 one-offs (>GBP 50m), modest adjusted operating profit growth (+0.6%), a sharp Australia volume decline (~50%), and short-term promotional drag in U.S. NGP (~GBP 13m). Management expects many headwinds to ease in H2 and reiterated guidance, indicating confidence in a step-up in performance.Positive Updates
Strong Cash Generation
Generated GBP 2.6 billion of free cash flow over the past 12 months; operating cash conversion of 98% on a 12-month basis, supporting disciplined capital allocation.
Negative Updates
Modest Adjusted Operating Profit Growth
Group adjusted operating profit rose only 0.6% in H1, reflecting one-offs and regional headwinds despite broad-based revenue growth.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Cash Generation
Generated GBP 2.6 billion of free cash flow over the past 12 months; operating cash conversion of 98% on a 12-month basis, supporting disciplined capital allocation.
Read all positive updates
Company Guidance
Management reconfirmed full‑year guidance and a wide range of key metrics: tobacco net revenue growth expected in the low single digits and NGP net revenue growth in the double digits, adjusted operating profit growth targeted within the mid‑term 3–5% range, and at least high‑single‑digit EPS growth; free cash flow guidance is at least GBP 2.2bn (including 2030 implementation and Delaware cash costs). First‑half and 12‑month traction included group adjusted operating profit +0.6% (H1), 12‑month free cash flow GBP 2.6bn, operating cash conversion 98% (12‑month), leverage 2.4x (flat YoY) and expected to be around the lower end of the target range at year‑end, and an adjusted effective tax rate of 23.5% (flat). H1 saw price/mix strength (Europe +6%, U.S. +5.7%, AAACE ex‑Australia +6.1%), over GBP 50m of identified one‑offs in H1 (including ~GBP 13m NGP promotional impact), a GBP 150m Delaware cash payment in H1 (GBP 162m remaining in roughly equal instalments over three years), a 4% increase in the ordinary dividend, and an on‑track GBP 1.45bn share buyback (part of GBP 4.8bn total buybacks and GBP 11.5bn cumulative capital returns since FY21); foreign‑exchange is expected to be a 0–1% headwind to operating profit and EPS.Imperial Brands Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
65
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 19.54B | 32.17B | 32.41B | 32.48B | 32.55B | 32.79B |
| Gross Profit | 6.73B | 7.00B | 6.78B | 6.68B | 6.04B | 6.03B |
| EBITDA | 3.76B | 4.37B | 4.14B | 4.25B | 4.93B | 4.58B |
| Net Income | 1.75B | 2.07B | 2.61B | 2.33B | 1.57B | 2.83B |
Balance Sheet | ||||||
| Total Assets | 28.23B | 28.71B | 27.83B | 29.49B | 30.96B | 29.09B |
| Cash, Cash Equivalents and Short-Term Investments | 497.02M | 1.44B | 1.08B | 1.34B | 1.85B | 1.29B |
| Total Debt | 11.23B | 10.00B | 9.08B | 9.73B | 10.26B | 10.07B |
| Total Liabilities | 23.63B | 23.28B | 21.80B | 22.85B | 23.48B | 23.15B |
| Stockholders Equity | 4.03B | 4.82B | 5.44B | 6.02B | 6.86B | 5.35B |
Cash Flow | ||||||
| Free Cash Flow | 2.81B | 2.86B | 3.27B | 2.95B | 2.58B | 1.57B |
| Operating Cash Flow | 3.11B | 3.24B | 3.31B | 3.13B | 2.83B | 1.77B |
| Investing Cash Flow | -357.43M | -415.00M | -348.00M | -437.00M | -163.00M | 695.00M |
| Financing Cash Flow | -2.90B | -2.52B | -3.16B | -2.63B | -2.15B | -2.79B |
Imperial Brands Technical Analysis
Positive
43.35
Price Trends
37.02
Positive
38.53
Positive
39.61
Negative
Market Momentum
0.08
Negative
62.92
Neutral
85.44
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IMBBY, the sentiment is Positive. The current price of 43.35 is above the 20-day moving average (MA) of 36.81, above the 50-day MA of 37.02, and above the 200-day MA of 39.61, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 62.92 is Neutral, neither overbought nor oversold. The STOCH value of 85.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IMBBY.
Imperial Brands Risk Analysis
Imperial Brands disclosed 12 risk factors in its most recent earnings report. Imperial Brands reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Imperial Brands Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $295.88B | 27.14 | -105.29% | 3.59% | 8.48% | 45.92% | |
71 Outperform | $121.95B | 15.53 | -255.35% | 7.02% | 0.75% | -19.96% | |
69 Neutral | $28.83B | 13.47 | 39.24% | 5.33% | 10.00% | -25.42% | |
69 Neutral | $131.63B | 13.30 | 16.33% | 5.22% | 2.16% | 171.90% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $1.62B | 27.52 | 17.29% | 0.28% | 16.10% | 26.07% | |
53 Neutral | $1.32B | 40.88 | 2.24% | 6.15% | -0.77% | -65.72% |
* Consumer Defensive Sector Average
IMBBY
Imperial Brands
38.59
1.04
2.76%
MO
Altria Group
74.21
19.03
34.49%
BTI
British American Tobacco
62.84
13.89
28.36%
PM
Philip Morris
192.98
18.81
10.80%
UVV
Universal
53.14
1.53
2.96%
TPB
Turning Point Brands
82.84
4.53
5.79%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.