RBC raises Imperial Brands target to GBP24; keeps rating

On Friday, RBC Capital Markets adjusted its outlook on Imperial Brands (IMB:LN) (OTC:IMBBY), increasing the price target to GBP24.00 from GBP21.00, while keeping a Sector Perform rating on the stock. The revision reflects a positive view of the company’s market share and its consistent performance in meeting expectations, which bolsters confidence in Imperial Brands’ potential for operating profit growth.

The updated valuation by RBC Capital is based on Imperial Brands’ solid track record and the anticipation that the current management’s departure will not result in significant changes to the company’s strategy or capital allocation policy. Despite expressing regret over the exit of a highly regarded CEO, RBC Capital analysts anticipate stability in the firm’s direction.

The analysts noted, "Encouraging market share and a track record of delivery on expectations give us higher confidence in Imperial Brands’ operating profit growth outlook, driving our higher estimates." This statement underscores the rationale behind the increased price target, as RBC Capital sees a robust growth trajectory for Imperial Brands.

The maintenance of the Sector Perform rating indicates that while RBC Capital acknowledges Imperial Brands’ strengths, it views the company as adequately valued at present, relative to industry peers. The rating suggests that the stock is expected to perform in line with the sector.

In conclusion, RBC Capital’s revised price target of GBP24.00, up from GBP21.00, is a result of Imperial Brands’ consistent performance and market share gains. The firm’s analysts maintain their Sector Perform rating, signaling their expectation that the stock will track the sector’s performance closely.

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