June 22, 2023
Top 10 Stock Imperial Brands Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Imperial Brands – Top 10 Stock in FTSE 100 Index
imperialbrandsplc.comindex.html
Imperial Brands is listed as a top 10 stock on June 22, 2023 in the market index FTSE 100 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is below average and thus a signal for caution. Based on the Obermatt 360° View of 45 (45% performer), Obermatt assesses an overall hold recommendation for Imperial Brands on June 22, 2023.
Snapshot: Obermatt Ranks
| Country | United Kingdom |
| Industry | Tobacco |
| Index | FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, SDG 12, SDG 13, SDG 3, SDG 6, SDG 8 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Imperial Brands Hold
| 360 METRICS | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 60 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 10 |
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| SENTIMENT | ||||||||
| SENTIMENT | 40 |
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| 360° VIEW | ||||||||
| 360° VIEW | 45 |
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ANALYSIS: With an Obermatt 360° View of 45 (better than 45% compared with alternatives), overall professional sentiment and financial characteristics for the stock Imperial Brands are below the industry average. The 360° View is based on consolidating four consolidated indicators, with half of the metrics below and half above average for Imperial Brands. The consolidated Value Rank has an attractive rank of 60, which means that the share price of Imperial Brands is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 60% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 67, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 40. Professional investors are more confident in 60% other stocks. Worryingly, the company has risky financing, with a Safety rank of 10. This means 90% of comparable companies have a safer financing structure than Imperial Brands. ...read more
RECOMMENDATION: With a 360° View of 45, Imperial Brands is worse than 55% of all alternative stock investment opportunities based on the Obermatt Method. Even though half of the consolidated Obermatt Ranks are above-average, namely the Value Rank at 60 and the Growth Rank above-average at 67, the picture is still mixed. The professional investor community is skeptical, with the Sentiment Rank below-average at 40. In addition, the company financing structure is on the riskier side (Safety Rank of 10). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. One may be tempted by above-average growth, but that could also change quickly, as past performance is not a good indicator of future performance. Since the financing structure is on the risky side, investors should be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Imperial Brands only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 40 (better than 40% compared with alternatives), overall professional sentiment and engagement for the stock Imperial Brands is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Imperial Brands. Analyst Opinions are at a rank of 40 (worse than 60% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 30, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 33, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 67% of competitors). On the upside, the Professional Investors rank is 90, which means that professional investors hold more stock in this company than in 90% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 40 (less encouraging than 60% compared with investment alternatives), Imperial Brands has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Imperial Brands stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Imperial Brands Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 60 (better than 60% compared with alternatives), Imperial Brands shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Imperial Brands. Price-to-Profit (also referred to as price-earnings, P/E) is 100 which means that the stock price compared with what market professionals expect for future profits is lower than for 100% of comparable companies, indicating a good value concerning Imperial Brands's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 34, which means that the stock price is lower as regards to invested capital than for 34% of comparable investments. On the other hand, Price-to-Sales is less favorable than 82% of alternatives (only 18% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 4% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 60, is a BUY recommendation based on Imperial Brands's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: Imperial Brands Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), Imperial Brands shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Imperial Brands. Profit Growth has a rank of 55 which means that currently professionals expect the company to grow its profits more than 55% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 84, and Stock Returns has a rank of 77 which means that the stock returns have recently been above 77% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 8 (92% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 67, is a BUY recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Imperial Brands Debt Financing Safety risky
| SAFETY METRICS | June 22, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 7 |
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| REFINANCING | ||||||||
| REFINANCING | 12 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 51 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 10 |
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ANALYSIS: With an Obermatt Safety Rank of 10 (better than 10% compared with alternatives), the company Imperial Brands has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Imperial Brands is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Imperial Brands. Liquidity is at 51, meaning the company generates more profit to service its debt than 51% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 12, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 88% of its competitors. Leverage is also high at a rank of 7, which means that the company has an above-average debt-to-equity ratio. It has more debt than 93% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 10 (worse than 90% compared with alternatives), Imperial Brands has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Imperial Brands Below-Average Financial Performance
| COMBINED PERFORMANCE | June 22, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 60 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 51 |
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| COMBINED | ||||||||
| COMBINED | 41 |
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ANALYSIS: With an Obermatt Combined Rank of 41 (worse than 59% compared with investment alternatives), Imperial Brands (Tobacco, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Imperial Brands are a good value (attractively priced) with a consolidated Obermatt Value Rank of 60 (better than 60% of alternatives), show above-average growth (Growth Rank of 67) but are riskily financed (Safety Rank of 10), which means above-average debt burdens. ...read more
RECOMMENDATION: An Obermatt Combined Rank of 41, is a hold recommendation based on Imperial Brands's financial characteristics. As the company Imperial Brands's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 60) and above-average growth (Obermatt Growth Rank of 67), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 10) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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