London, April 25, 2026, 20:02 BST
Imperial Brands PLC pressed on with its £1.45 billion buyback this Friday, picking up 179,206 shares for cancellation—a standard move, but one that landed just as Morgan Stanley slapped the tobacco group with a new downgrade. The company shelled out an average 2,768.2686 pence per share. Once the purchase clears and the shares are cancelled, Imperial’s share count drops to 778,437,959 ordinary shares.
Buybacks are carrying much of the weight for the Imperial Brands investment story these days, as doubts swirl about cigarette price hikes making up for flagging market share. London markets shut for the weekend with Imperial finishing Friday at 2,769p, slipping 0.11%.
Morgan Stanley downgraded Imperial Brands to “equal-weight” while bumping British American Tobacco up to “overweight” on Friday, calling BAT its top European tobacco pick, Sharecast reported. The bank also trimmed its price target for Imperial to 3,050p from 3,200p, highlighting the divide between Imperial’s cash-return strategy and BAT’s bigger bet on next-generation nicotine products. London South East
The downgrade came after Imperial’s tough April 14 update, where it flagged slight market-share declines in its largest regions and projected just modest profit gains for the first half. Shares slid more than 8% that day—assuming those losses stuck, it would mark the steepest single-day fall since September 2019, according to Reuters.
Derren Nathan, head of equity research at Hargreaves Lansdown, called Imperial’s performance a “slow but steady start.” He pointed to the 3% to 5% operating profit growth target for 2026 as still plausible, assuming the second half picks up. Still, Nathan flagged that mounting losses in next-generation products — including vapes, heated tobacco, and nicotine pouches — along with market share pressure, have left investors feeling “underwhelmed.” Hargreaves Lansdown
Russ Mould, investment director at AJ Bell, didn’t mince words about cash flow. Imperial “must work hard to generate the cash flow that funds its dividends and share buybacks,” he said. Nervousness among investors spiked after management flagged market-share concerns in Australia, Germany, Spain, the UK, and the United States, plus a sluggish first-half for NGP sales. AJ Bell
Some analysts aren’t seeing a busted story in the recent slide. Kristoffer Inton, a senior equity analyst at Morningstar, said he was “not that concerned” over the forecasted drop in market share, framing it as a deliberate push for profitability. His fair value estimate for the shares stays at £33. Morningstar
Richard Hunter, head of markets at interactive investor, said Imperial’s “aggressive shareholder return programme” is likely to keep supporting the shares, assuming nothing else changes. He flagged the £1.45 billion buyback—roughly halfway done when the company released its trading update—as well as a 5.2% dividend yield. Interactive Investor
The risks aren’t hard to spot. Should share declines speed up, US nicotine-pouch deals hit profits harder, or war in the Middle East push up costs—energy, shipping, or otherwise—Imperial could have trouble hitting that promised second-half lift. Still, the company stuck to its full-year goals, aiming for at least £2.2 billion in free cash flow, and reported no significant hit from the conflict so far. Even so, management flagged uncertainty about the rest of the year and said they’d have more to say when first-half results drop on May 12.
