Imperial Brands edges higher after upbeat broker note on buyback strength

Imperial Brands PLC shares rose 2% after Panmure Liberum reiterated its 'Buy' rating and 3,900p target, citing the company's consistent performance and robust capital returns, including a £1.45 billion share buyback. The broker highlighted Imperial's 40% share price outperformance over the past year, expecting high single-digit adjusted EPS growth, and noted its attractive valuation at nine times forecast 2026 earnings with a 5.6% yield, alongside continued share count reduction.

Analysis

Imperial Brands edges higher after upbeat broker note on buyback strength Published: 11:34 07 Oct 2025 BST Shares in Imperial Brands PLC (LSE:IMB) rose 2% on Tuesday after Panmure Liberum reiterated its Buy rating and 3,900p target price, praising the tobacco group’s consistency and capital returns. The rally also helped lift British American Tobacco, which gained in sympathy. In a note titled “The Magnificent One,” the broker said Imperial’s share price had climbed 40% over the past year, outperforming global technology heavyweights such as Microsoft, Amazon, Meta and Apple, while offering “lower volatility and a higher yield” (Panmure Liberum). The analysts noted that full-year trading was in line with guidance and that adjusted earnings per share are expected to show high single-digit growth, helped by a further 5% reduction in the share count. Imperial’s £1.45 billion buyback for the current year, up from £1.25 billion previously, was described as “largely self-financing,” following three years of repurchases that have cut equity by 16% and saved over £240 million annually in dividend costs. Panmure said the stock remains attractive, trading on just nine times forecast 2026 earnings and yielding about 5.6%, with another 6% of shares set to be bought back this year. “This is easy. Buy,” the broker concluded. Imps' shares rose 63p to 3,067p, while BATs' were up 61p at 3,846p. Imperial Brands (LSE:IMB) shares advanced 2% following a reiterated "Buy" rating and 3,900p price target from Panmure Liberum, driven by robust capital returns and consistent performance. This positive analyst note, titled "The Magnificent One," also saw British American Tobacco (BTI) share price rise in sympathy, reflecting broader sector sentiment. The positive market reaction underscores investor confidence in IMB's strategic capital allocation. The broker highlighted Imperial's significant 40% share price outperformance over the past year against global tech heavyweights, offering lower volatility and a higher yield. Full-year trading aligned with guidance, with adjusted earnings per share projected for high single-digit growth, supported by a 5% reduction in the share count. This consistent execution and capital efficiency are key drivers of value. Imperial Brands' upsized £1.45 billion share buyback, described as "largely self-financing," follows three years of repurchases that reduced equity by 16% and saved £240 million annually in dividend costs. The stock remains attractively valued at nine times forecast 2026 earnings, boasts a 5.6% yield, and anticipates a further 6% of shares to be bought back. These metrics indicate a strong shareholder return profile and potential undervaluation.

Key Decisions for Investors

• Investors should consider a long position in Imperial Brands, given the strong analyst endorsement, robust capital return program, and attractive valuation metrics.
• Monitor the execution of the £1.45 billion share buyback and its impact on EPS growth, as well as the company's ability to maintain high single-digit adjusted EPS growth.
• Evaluate the sustainability of Imperial Brands' yield and the potential for continued share count reduction to drive shareholder value in the long term.