London, April 27, 2026, 14:03 BST
- Imperial Brands shares traded lower on Monday, even as the company kept buying back stock.
- Morgan Stanley cut Imperial to “equal-weight” on Friday and raised British American Tobacco to “overweight.”
- The next real test is May 12, when the Winston and Davidoff maker reports first-half results.
Imperial Brands PLC shares slipped on Monday, keeping pressure on the tobacco group’s £1.45 billion buyback after a late-Friday filing showed another share repurchase and a broker downgrade put rival British American Tobacco back in the market’s favour. The company’s share-price data showed Imperial down 0.23% at 2,765.50 pence, with volume at about 2.76 million shares.
The timing matters. Imperial is trying to show that cash returns can steady investors before first-half results due on May 12, after an April trading update raised questions over market share, foreign exchange and the pace of growth in next generation products, its term for vapes, heated tobacco and nicotine pouches.
Imperial said it bought 179,206 ordinary shares on April 24 for cancellation at an average price of 2,768.2686 pence, through Barclays, under the buyback programme announced last October. After settlement and cancellation, the company said the remaining number of ordinary shares in issue would be 778,437,959, excluding treasury shares.
The buyback is not small, but it is no longer enough on its own. Alliance News reported on Friday that Morgan Stanley cut Imperial to “equal-weight” while raising British American Tobacco to “overweight,” a neat sign of where some sector money may be rotating. London South East
Imperial’s April 14 trading update kept full-year guidance in place. The group said it remained on track for low-single-digit tobacco revenue growth, double-digit next generation product revenue growth, three to five percent adjusted operating profit growth and at least £2.2 billion of free cash flow for the year. Constant currency strips out exchange-rate movements; adjusted profit is a non-GAAP measure, meaning it excludes certain items to compare periods more easily.
But investors focused on the weaker bits. Imperial said it expected a modest aggregate market-share reduction across its top five markets in the first half, even as tobacco adjusted operating profit grows. Reuters reported that the update knocked the shares down more than 8% on April 14 and left the company more reliant on a stronger second half.
Russ Mould, investment director at AJ Bell, said “Imperial Brands still has pricing power,” but also noted that investors were unsettled by the company’s market-share comments and a slower start for next generation products. He said the shares had reached their highest level since 2017 before the latest pullback, leaving some holders with a reason to take profits. Ajbell
Morningstar analyst Kristoffer Inton took a less negative line. He wrote that he was “not that concerned” by the expected share loss because it reflected a focus on profitability, and said the long-term potential for next generation products was “undented.” Morningstar kept its fair value estimate at £33, or 3,300 pence. Morningstar
The risk is that the second-half recovery does not come through cleanly. Imperial flagged uncertainty from the Middle East conflict, said foreign exchange would be a 2.0% to 2.5% headwind to first-half earnings per share, and disclosed that next generation product losses were expected to be moderately higher. It also made a $200 million payment to R.J. Reynolds in the first half after a Delaware Supreme Court decision, with another $234 million due in instalments over the next three years.
That leaves May 12 carrying more weight than usual. If Imperial shows the promised pricing, cash flow and second-half acceleration, the buyback may look like support. If market-share losses deepen or nicotine pouches stay promotional in the U.S., the latest repurchase will look more like a cushion than a catalyst.
