12 May 2026
If you are covering Imperial Brands' latest results, please see the following comment from Chris Beckett, consumer staples analyst at Quilter Cheviot:
“Imperial Brands delivered a solid and predictable set of half year results, showing that its core pricing led model continues to work as expected. Price increases of around 3% once again more than offset declining cigarette volumes, allowing the group to deliver steady revenue and earnings growth despite ongoing structural pressures in tobacco.
“Volumes continue to fall in developed markets, but the pace was slightly better than expected, reinforcing Imperial’s ability to manage decline through disciplined pricing. This remains the central investment case. As long as price rises outpace volume losses, earnings and cash flow remain well supported, even if the share price response is often muted given how familiar this dynamic has become for investors.
“Where the update was more encouraging was in next generation products. Progress here continues to improve, with market share gains across vaping, heated tobacco and nicotine pouches. While these categories are still small in group terms and not yet a meaningful profit driver, the direction of travel is positive and compares more favourably with peers than in previous years. The question for investors is whether that improvement is enough to warrant a higher valuation multiple.
“Imperial’s shares have continued to underperform British American Tobacco, reflecting a view that BAT’s scale and more established reduced risk portfolio deserve a premium rating. That said, Imperial’s results underline that it remains a highly cash generative business, with pricing power doing exactly what it needs to do in a challenging volume environment.
“Overall, this was a solid rather than exciting update reinforcing the durability of Imperial’s earnings and dividend, but also explains why the shares struggle to re rate meaningfully. For investors focused on income and cash returns, the case remains intact, even if BAT remains the preferred single stock exposure within the sector.”
