One-glance verdict
Undervalued
$123.78 our estimate vs market $38.80
Wall Street consensus: $44.00 (-64.5% lower than our fair-value estimate)
69% below our estimate, below the bear case
Fundamentals snapshot
Imperial Brands PLC
IMBBY · OQX · Consumer Defensive · Tobacco
Current price
$38.80
52-week range
$32.07 - $45.60
Market cap
$28.97B
Balance sheet
Distressed
7.65x Adequate
Net debt $14.23B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Returns 37.2% on equity, ahead of 66% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 14.4% above its 5-year average P/E.
- Risk Net debt grew 1.8% over 3 years.
What this company does
Imperial Brands PLC
Imperial Brands PLC makes and sells tobacco products like cigarettes and also newer things like e-cigarettes and oral nicotine, with most of their money coming from selling these goods around the world. This matters because the company is a big player in the traditional tobacco market while also trying to grow in newer product categories.
How the company got here
Imperial Brands PLC, originally founded in 1636 as an English tobacco company, has a long history in the tobacco industry. It evolved over centuries, eventually becoming Imperial Tobacco Group PLC before rebranding to Imperial Brands PLC in 2016. This name change signaled a broader focus beyond traditional tobacco, acknowledging the changing landscape of consumer preferences and the rise of alternative products. The company has grown through acquisitions and organic expansion, establishing a significant global presence in the tobacco and related products market.
What it actually does
Imperial Brands PLC is primarily known for making and selling tobacco products like cigarettes and fine-cut tobacco for rolling your own. They also offer tobacco-related accessories and are expanding into newer product categories such as e-cigarettes (vapour) and heated tobacco products. You'll recognize their products by well-known brands found in many convenience stores and supermarkets around the world. The company operates globally, selling its diverse range of products across Europe, the Americas, Africa, and Asia.
Next Generation Products
This segment focuses on products that are alternatives to traditional cigarettes, such as e-cigarettes (often called vapour products) and heated tobacco. These are designed to offer smokers different ways to consume nicotine, often with the aim of reducing some of the risks associated with smoking combustible tobacco. Imperial Brands invests in research and development for these products, aiming to capture a share of a growing market as consumer preferences shift. This is a smaller but strategically important part of the business, representing the company's efforts to adapt to evolving regulations and consumer demand.
Tobacco
This is the core and largest part of Imperial Brands' business, encompassing traditional cigarettes and fine-cut tobacco used for hand-rolled cigarettes. The company manufactures and markets a wide array of cigarette brands, catering to different markets and consumer preferences globally. Revenue from this segment forms the bulk of the company's income, providing the financial foundation for its investments in newer product categories. Despite declining smoking rates in some developed markets, tobacco products continue to generate substantial profits.
What management is betting on now
Imperial Brands' management is focused on navigating the evolving tobacco industry by strengthening its core tobacco business while significantly investing in its 'Next Generation Products' (NGP). This strategy aims to balance the consistent cash flow from traditional cigarettes with the growth potential of newer, potentially less harmful, nicotine delivery systems. They are prioritizing innovation and market penetration in vapour and heated tobacco to adapt to changing consumer habits and regulatory environments. The goal is to ensure long-term relevance and profitability by offering a diverse portfolio that meets a wide range of consumer needs.
Price history
How the share price has moved
—
Loading price history…
Is it cheap or expensive?
Fair value $123.78 vs current price $38.80
Wall Street consensus is the average analyst price target: $44.00 (-64.5% lower than our fair-value estimate).
Our most-likely fair value is $123.78 a share — about 219.0% above today's price of $38.80, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $14.2B. Interest coverage 7.7x.
Net debt
$14.23B
Interest coverage
7.65x
Imperial Brands PLC's profit covers its interest bill about 7.7 times over. which is stronger than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
IMBBY
BASELINE
Imperial Brands PLC
Total debt $14.89B Interest coverage 7.65x This is the baseline the peer rows are being compared against.
Total debt $46.49B Interest coverage 6.05x -21% vs IMBBY Carries about 1.3x less debt cushion than IMBBY.
Total debt $47.73B Interest coverage 9.41x +23% vs IMBBY Carries about 1.2x more debt cushion than IMBBY.
Total debt $24.06B Interest coverage 10.23x +34% vs IMBBY Carries about 1.3x more debt cushion than IMBBY.
Total debt $11.74B Interest coverage 4.37x -43% vs IMBBY Carries about 1.7x less debt cushion than IMBBY.
What you should know
The case for and against IMBBY
3 Rewards
3 Risks
Rewards
-
Returns 37.2% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Trades at 13.6x P/E vs peer median 15.9x (14.6% cheaper).
Risks
-
Stock trades 14.4% above its 5-year average P/E.
-
Net debt grew 1.8% over 3 years.
-
Insider ownership is only 0.0% (peer median: 0.1%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
13.61x
Forward P/E
7.86x
P/B
5.70x
P/S
1.49x
EV/EBITDA
10.48x
PEG ratio
0.81x
Profitability
How much profit each dollar creates
Gross margin
36.3%
Operating margin
18.0%
Net margin
9.0%
ROE
37.2%
ROA
7.8%
Health
Liquidity and balance-sheet strength
Debt / equity
2.44x
Current ratio
0.70x
Quick ratio
0.31x
Total debt
$14.89B
Total cash
$658.96M
Growth
How the business has been compounding
Revenue TTM
$25.73B
Revenue 5Y CAGR
-0.4%
EPS TTM
2.85
EPS 5Y CAGR
14.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$4.81B
Free CF TTM
$4.20B
FCF margin
16.3%
Dividend
Shareholder payout
Yield
5.6%
Payout ratio
76.3%
Last ex-div date
2026-08-21