Imperial Brands (IMBBY) AI Stock Analysis

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Imperial Brands

(OTC:IMBBY)

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Outperform 74 (OpenAI - 4o)

Rating:74Outperform

Price Target:

$48.00

▲(10.73% Upside)

Imperial Brands scores well due to strong earnings growth and strategic advancements in NGP, supported by a solid valuation and stable financial performance. The technical analysis indicates moderate momentum, while the high leverage ratio remains a concern.

Positive Factors

NGP Growth and Expansion

The strong growth in Next Generation Products (NGP) reflects Imperial Brands' successful adaptation to changing consumer preferences, positioning the company well for future growth in reduced-risk products.

Cash Flow Generation

Robust cash flow generation enhances financial flexibility, allowing Imperial Brands to invest in growth initiatives, return capital to shareholders, and manage debt effectively.

Operational and Strategic Achievements

Strategic market share gains and operational improvements indicate strong competitive positioning and effective execution of growth strategies.

Negative Factors

High Leverage Ratio

Significant leverage poses a risk to financial stability, potentially limiting Imperial Brands' ability to invest in growth and weather economic downturns.

Challenges in U.K. and Australia

Regulatory challenges and illicit trade in key markets could pressure margins and hinder revenue growth, impacting long-term profitability.

Market Share Challenges

Declining market share in major regions suggests competitive pressures and potential difficulties in maintaining sales volumes, affecting future revenue stability.

Imperial Brands (IMBBY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$33.83B

Dividend Yield5.26%

Average Volume (3M)55.97K

Price to Earnings (P/E)13.0

Beta (1Y)-0.11

Revenue Growth6.03%

EPS Growth-13.72%

CountryUS

Employees25,600

SectorConsumer Defensive

Sector Strength42

IndustryTobacco

Share Statistics

EPS (TTM)2.49

Shares Outstanding797,504,300

10 Day Avg. Volume0

30 Day Avg. Volume55,969

Financial Highlights & Ratios

PEG Ratio1.08

Price to Book (P/B)4.02

Price to Sales (P/S)0.81

P/FCF Ratio7.00

Enterprise Value/Market Cap1.00

Enterprise Value/Revenue1.51

Enterprise Value/Gross Profit4.21

Enterprise Value/Ebitda7.78

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

EPS Forecast (FY)4.56

Revenue Forecast (FY)$13.54B

Imperial Brands Business Overview & Revenue Model

Company DescriptionImperial Brands PLC is a multinational tobacco company headquartered in Bristol, United Kingdom. The company operates in the tobacco and nicotine sectors, focusing on the manufacture and sale of a diverse range of products including cigarettes, fine cut tobacco, and other nicotine products. Imperial Brands markets well-known brands such as Davidoff, West, and JPS, and is increasingly investing in reduced-risk products such as vaping devices and heated tobacco products to adapt to changing consumer preferences and regulatory landscapes.

How the Company Makes MoneyImperial Brands generates revenue primarily through the sale of its tobacco products, including traditional cigarettes and rolling tobacco, which remain its largest revenue source. The company has also been expanding its portfolio in the reduced-risk products segment, which includes e-cigarettes and heated tobacco, aimed at attracting a broader customer base and addressing declining cigarette consumption. Key revenue streams include retail sales, bulk sales to distributors, and international markets where it maintains a strong presence. Additionally, Imperial Brands engages in strategic partnerships and acquisitions to enhance its product offerings and market reach, which contribute to its overall earnings.

Imperial Brands Key Performance Indicators (KPIs)

Any

Operating Profit by Segment

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.

Chart InsightsImperial Brands' Tobacco & NGP segment shows a volatile yet upward trend in operating profit, peaking in late 2024. This suggests strategic adjustments are paying off, possibly through product innovation or market expansion. Meanwhile, the Distribution segment has seen steady growth, indicating operational efficiency and stable demand. The absence of earnings call commentary leaves room for speculation on future strategic directions, but the current trajectory suggests resilience and potential for sustained profitability.

Data provided by:

The Fly

Imperial Brands Earnings Call Summary

Earnings Call Date:Nov 18, 2025

(Q4-2025)

% Change Since: |

Next Earnings Date:May 19, 2026

Earnings Call Sentiment Positive

Imperial Brands demonstrated strong financial results with significant growth in revenue, earnings per share, and successful capital returns, alongside strategic advancements in NGP. However, challenges remain in maintaining market share stability and navigating regulatory and market dynamics in key regions.

Q4-2025 Updates

Positive Updates

Strong Financial Performance

The fiscal year '25 saw a revenue growth of more than 4% and an improvement of more than 9% in earnings per share. The company maintained share in priority markets, achieved double-digit revenue growth in NGP, and experienced strong cash flow.

Successful Share Buyback Program

Imperial Brands repurchased over 5% of its share capital during the year, bringing the total repurchase to 15.8% since the program began in 2022. The company plans to increase the FY '26 share buyback to GBP 1.45 billion.

NGP Growth and Expansion

NGP recorded double-digit revenue growth with share increases in all categories. The company saw significant growth in the modern oral segment with Zone in the U.S. and Skruf in the Nordics. There was also progress in heated tobacco with the new Pulze 3.0 device.

Operational and Strategic Achievements

Imperial Brands achieved a 48 basis points improvement in aggregate market share over five years, with NGP revenue up 73% and EPS up by 1/3. The company has returned GBP 10 billion in capital returns since 2021.

Negative Updates

Challenges in U.K. and Australia

Both markets face rising excise rates, leading to growing illicit trades. These trends are expected to continue into fiscal year '26.

Financial Adjustments and Impairment Charges

The company disclosed impairment charges related to ceasing production at the Langenhagen factory and initial costs of a wider transformation program. These costs align with the guidance given at the Capital Markets Day.

Market Share Challenges

In Spain, there was a strategic decision to monetize share gains. In the U.S. and Germany, the scanner data indicated slightly negative volume share performance, raising concerns about balancing share stability versus value delivery.

Company Guidance

During the call to discuss Imperial Brands' fiscal year 2025 results, key performance metrics were highlighted, showcasing a year of robust growth. The company reported a revenue increase of over 4% and an improvement of more than 9% in earnings per share. They maintained market share in priority markets while achieving strong pricing in combustibles. Notably, the NGP segment experienced double-digit revenue growth, with a 73% rise in NGP revenue over the past five years. The company also posted a strong cash flow, supporting increases in both dividends and share buybacks. Looking forward, Imperial Brands plans capital returns exceeding GBP 2.7 billion in fiscal year 2026, and they expect group adjusted operating profit to grow between 3% to 5%. The ongoing transformation, combined with a strategic focus on consumer intimacy and technology investments, aims to deliver sustainable shareholder value.

Imperial Brands Financial Statement Overview

Summary

Imperial Brands demonstrates solid financial health with strong profitability and cash flow generation. The company faces challenges in revenue growth and has a high leverage ratio, but its efficient operations and robust cash flow provide a stable financial foundation.

Income Statement

Positive

Imperial Brands shows a mixed performance in its income statement. The company has maintained a solid gross profit margin of 26.9% in the latest year, indicating efficient cost management. However, the revenue growth rate has declined by 0.875%, reflecting challenges in expanding sales. The net profit margin is stable at 8.4%, showcasing consistent profitability. The EBIT and EBITDA margins are healthy at 11.1% and 13.6% respectively, indicating strong operational efficiency.

Balance Sheet

Positive

The balance sheet reveals a high debt-to-equity ratio of 1.54, suggesting significant leverage, which could pose a risk if not managed carefully. Return on equity is robust at 41.6%, indicating effective use of shareholder funds to generate profits. The equity ratio stands at 16.8%, reflecting a moderate level of equity financing relative to total assets.

Cash Flow

Positive

Cash flow analysis shows strong performance with a notable free cash flow growth rate of 34.2%, highlighting improved cash generation capabilities. The operating cash flow to net income ratio is 1.57, indicating that the company generates ample cash relative to its net income. The free cash flow to net income ratio is 0.88, demonstrating effective conversion of earnings into cash.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	22.52B	32.17B	32.41B	18.08B	16.92B	16.56B
Gross Profit	8.08B	8.66B	6.78B	6.68B	5.65B	5.57B
EBITDA	4.37B	4.37B	4.14B	4.15B	3.52B	4.34B
Net Income	2.50B	2.70B	2.61B	2.33B	1.57B	2.83B
Balance Sheet
Total Assets	38.66B	38.66B	27.83B	29.49B	30.96B	29.09B
Cash, Cash Equivalents and Short-Term Investments	1.94B	1.94B	1.08B	1.38B	1.85B	1.29B
Total Debt	10.00B	10.00B	9.08B	9.73B	10.26B	10.07B
Total Liabilities	31.34B	31.34B	21.80B	22.85B	23.48B	23.15B
Stockholders Equity	6.49B	6.49B	5.44B	6.02B	6.86B	5.35B
Cash Flow
Free Cash Flow	4.19B	3.73B	3.27B	2.95B	2.58B	1.57B
Operating Cash Flow	4.66B	4.23B	3.31B	3.13B	2.83B	1.77B
Investing Cash Flow	-470.91M	-541.83M	-348.00M	-437.00M	-163.00M	710.00M
Financing Cash Flow	-3.64B	-3.29B	-3.16B	-2.63B	-2.15B	-2.79B

Imperial Brands Technical Analysis

Technical Analysis Sentiment

Positive

Last Price43.35

Price Trends

50DMA

41.41

Positive

100DMA

41.13

Positive

200DMA

39.09

Positive

Market Momentum

MACD

0.42

Positive

RSI

52.59

Neutral

STOCH

18.25

Positive

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 42.89, above the 50-day MA of 41.41, and above the 200-day MA of 39.09, indicating a neutral trend. The MACD of 0.42 indicates Positive momentum. The RSI at 52.59 is Neutral, neither overbought nor oversold. The STOCH value of 18.25 is Positive, 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

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMBBY	74 Outperform	$33.83B	13.00	39.46%	5.26%	6.03%	-13.72%
UVV	70 Neutral	$1.37B	12.42	7.72%	5.98%	3.01%	-7.14%
TPB	69 Neutral	$2.08B	38.43	22.54%	0.27%	6.71%	8.16%
MO	64 Neutral	$99.34B	11.29	―	7.02%	-0.96%	-11.42%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
PM	61 Neutral	$246.90B	28.73	―	3.59%	7.72%	-12.45%
BTI	59 Neutral	$124.54B	31.64	5.97%	5.22%	0.48%	―

* Consumer Defensive Sector Average

Performance Comparison

IMBBY

Imperial Brands

42.82

12.42

40.86%

Altria Group

58.39

8.21

16.36%

BTI

British American Tobacco

57.04

22.57

65.48%

Philip Morris

157.31

37.57

31.38%

UVV

Universal

54.55

3.17

6.17%

TPB

Turning Point Brands

109.03

50.07

84.92%

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.Date of analysis: Dec 19, 2025