London, April 24, 2026, 14:55 BST
Morgan Stanley downgraded Imperial Brands PLC to “equal-weight” on Friday, bumping up British American Tobacco instead to “overweight” in a sector reshuffle. Imperial, which has kept buybacks and pricing at the center of its returns strategy, slipped 0.18% to 2,767 pence on MarketScreener’s Cboe Europe estimate. British American Tobacco, meanwhile, rose 3.23% to 4,342 pence. MarketScreener
This downgrade comes at a tricky moment for Imperial, just as the company faces scrutiny ahead of its May 12 half-year numbers. Sticking to its full-year guidance, Imperial’s latest trading update flagged market-share losses in its top five regions and indicated that profit growth will be weighted toward the back half.
Imperial disclosed Thursday evening that it picked up 180,000 of its ordinary shares on April 23, paying an average 2,770.0744 pence apiece. Barclays executed the buyback. With this move, the company’s ordinary shares outstanding drop to 778,617,165, not counting treasury shares.
Earlier, Imperial snapped up 275,000 shares on April 22, paying an average 2,734.8202 pence. Both filings confirm the tobacco giant is moving forward with its £1.45 billion buyback plan for the financial year.
This isn’t simply a surface-level move: with fewer shares outstanding, earnings per share—the profit metric calculated by dividing earnings over the share count—get a boost, even if the company’s underlying growth remains lackluster. Imperial disclosed on April 14 that by March 31, it had already finished £0.7 billion of its FY26 buyback, part of an “evergreen” programme that stretches out to 2030. Investegate
Spring Mountain Investments Ltd cut its stake in Imperial, dropping its voting rights to 3.991658% from 4.797790% after crossing a threshold on April 21. The firm notified Imperial on April 23.
Growth is still the sticking point. Imperial forecasts low-single-digit revenue growth for both tobacco and next-generation products through the first half. Those NGPs — vapes, heated tobacco, nicotine pouches — are still burning cash as Imperial pushes for scale. The company is also bracing for a moderate increase in adjusted operating losses tied to NGPs.
Analysts aren’t ignoring the tension here. Russ Mould, investment director at AJ Bell, pointed out Imperial “must work hard to generate the cash flow that funds its dividends and share buybacks.” He noted worries around market-share erosion and currency swings hit the first-half update. AJ Bell
Richard Hunter at interactive investor flagged that the sector still faces a “perennially overhang” from shifting lifestyle preferences and stricter rules. He also noted that with no new catalyst in the trading update, investors were left flatfooted. Interactive Investor
The pressure from competitors is ramping up. Earlier this month, Reuters noted Imperial has usually priced below rivals like British American Tobacco and Philip Morris International. Those companies, though, have steered resources toward premium brands and poured more into innovation.
The second half could get tougher. Imperial noted that, to date, the Middle East conflict hasn’t significantly affected its business, but the group flagged ongoing uncertainty for later in the year; foreign exchange is now forecast to shave 0% to 1% off full-year EPS.
Investors face a familiar deal: modest organic growth in exchange for strong cash flow and consistent capital returns. Imperial’s first-half numbers land May 12, marking the next checkpoint.
