Imperial Brands PLC (LON: IMB) on 3 December 2025: High Dividend, £1.45bn Buyback and the Key Risks Investors Are Pricing In

Published: 3 December 2025

Key points

Share price: Imperial Brands closed at 3,263p in London today, up 0.06%, near a 52‑week high of 3,279p and valuing the group at about £26.1 billion. ^[1]
Income story: The FY25 dividend has been raised 4.5% to 160.32p per share, implying a ~4.9% trailing yield, with four equal quarterly payments now in place. ^[2]
Growth & cash: FY25 saw 4.1% constant‑currency growth in tobacco & NGP net revenue, 4.6% growth in adjusted operating profit and £2.7bn of free cash flow, with total shareholder returns of £10bn since FY21. ^[3]
Capital returns: A new £1.45bn FY26 buyback is under way, with daily “transaction in own shares” RNS notices on 1–2 December showing repurchases continuing into this week. ^[4]
Today’s catalysts: 3 December brings a Delaware Supreme Court hearing on a U.S. tobacco settlement dispute, the deadline for a UK nicotine retail licensing consultation, and a Morgan Stanley consumer conference appearance by the new CEO and CFO. ^[5]

Where Imperial Brands’ share price stands on 3 December 2025

Imperial Brands shares finished today’s London session at 3,263p, with a bid–offer spread of 3,262–3,263p and a day’s range between 3,242p and 3,273.65p. ^[6]

At this level:

The stock sits just below its 52‑week high of 3,279p, and well above the 52‑week low of 2,521p. ^[7]
One‑year share price performance is around +26–32%, depending on the exact start date and data vendor. ^[8]
The trailing P/E ratio is about 10x based on adjusted FY25 earnings of 315p per share. ^[9]
The indicated dividend yield is roughly 4.9–5.1%, using a total FY25 dividend of 160.32p. ^[10]

On the U.S. OTC market, the ADRs (IMBBY) last traded around $43.20 on 2 December, close to their 12‑month high after a strong year for the stock. ^[11]

With free cash flow of about £2.7bn in FY25 and a market cap near £26.1bn, Imperial’s free‑cash‑flow yield is roughly 10%, which is a big part of the investment narrative today. ^[12]

FY25 results: steady growth, big cash, bigger cheques

Imperial’s full‑year results for the year to 30 September 2025, published on 18 November, underpin much of the current enthusiasm around the shares. ^[13]

Headline numbers (adjusted, at constant currency where stated) include: ^[14]

Tobacco & NGP net revenue: £8.3bn, +4.1% at constant FX (+1.9% reported)
Group adjusted operating profit: £3.99bn, +4.6% at constant FX
Adjusted EPS: 315.0p, +9.1%
Free cash flow: about £2.7bn
Dividend per share:160.32p, up 4.5% year on year

Management highlighted: ^[15]

Stable or growing market share across its five “priority markets” (US, Germany, UK, Spain, Australia), with around 48bps of share gain versus FY20.
A further year of double‑digit NGP (Next‑Generation Products) revenue growth, led by modern oral nicotine pouches and vapour products.
Ongoing volume declines in combustibles, offset by pricing and mix improvements.

Independent analysis of the results has generally described them as solid rather than spectacular: modest top‑line growth, stronger profit and EPS growth thanks to buybacks, and a still‑dominant combustible franchise funding investment in smoke‑free products. ^[16]

Dividends: four equal quarterly payments and a near‑5% yield

One practical change for income investors is the move to four equal quarterly dividends: ^[17]

For FY25, three 40.08p interim dividends have been or will be paid, and from FY26 the “final” is also set at 40.08p per share, creating a smooth quarterly run‑rate.
The third interim dividend of 40.08p went ex‑dividend on 27 November 2025, with payment due on 31 December. ^[18]

At today’s 3,263p share price, the 160.32p full‑year dividend implies a trailing yield of just under 5%, with dividend cover around 2x on an adjusted EPS basis. ^[19]

That puts Imperial squarely in the high‑yield corner of the FTSE 100, even after a strong run in the shares, which is why the stock continues to feature in many “income ideas” lists and dividend screens. ^[20]

Buybacks: £10bn returned since FY21 and a fresh £1.45bn for FY26

Imperial has quietly turned itself into a buyback machine.

At its March 2025 Capital Markets Day, the company committed to 3–5% annual operating profit growth and a share buyback every year through 2030, targeting up to £3bn of free cash flow per year. ^[21]

By the FY25 results in November, management could say: ^[22]

Total capital returned to shareholders FY21–FY25 had reached £10bn, via dividends and buybacks.
The FY25 £1.25bn buyback was complete.
A new FY26 buyback of £1.45bn had been authorised and commenced.

On 7 October 2025, Reuters reported that Imperial had announced this additional £1.45bn buyback, with the company saying it was on track to meet guidance thanks to strong pricing and growing demand for smoking alternatives. ^[23]

As of this week:

RNS filings on 1 and 2 December 2025 show Imperial continuing to repurchase and cancel ordinary shares under the £1.45bn FY26 programme, alongside a separate update on total voting rights following the end of November. ^[24]
The latest voting‑rights statement indicates around 801.8m voting shares in issue, reflecting a meaningfully smaller share count than just a few years ago. ^[25]

The combined effect of dividends plus buybacks is that Imperial is currently delivering a double‑digit total cash‑return yield (dividends around 5%, buybacks roughly 5–6% of the market cap per year), which is central to the bullish case on the stock. ^[26]

Next‑generation products: Zone, blu and Pulze move centre‑stage

The FY25 results and recent news flow confirm that Next‑Generation Products (NGP) – primarily nicotine pouches, vapour and heated tobacco – are no longer a side‑note for Imperial. ^[27]

From the FY25 statement: ^[28]

NGP net revenue grew 13.7% at constant currency, another year of double‑digit growth.
NGP now accounts for a mid‑teens percentage of tobacco & NGP net revenue, up from a low base a few years ago.
Growth is particularly strong in oral nicotine in the US and Europe.

Recent commentary and company materials highlight: TS2 Tech+2Imperial Brands Corporate Site+2

Zone nicotine pouches
- Successful rollout across the US, with distribution in 100,000+ stores and a low‑single‑digit share of the “modern oral” category.
- November 2025 UK launch, positioning Zone as a tobacco‑free, discreet alternative for adult smokers.
blu vapour brand
- Imperial continues to push its blu pod‑based system in response to tighter regulation on disposables in several markets.
Pulze heated tobacco
- Ongoing expansion in European test markets such as Italy and Greece, part of the long‑term plan to build a competitive heat‑not‑burn offer.

At the March 2025 Capital Markets Day, Imperial framed these smoke‑free products as central to its 2030 strategy, with NGP expected to drive the upper end of its 3–5% operating profit growth ambition over time. ^[29]

External analysts broadly agree that NGP is now material to the Imperial story, while warning that regulatory and competitive risks remain high, particularly in vapour. TS2 Tech+2AInvest+2

Regulatory and legal backdrop: why 3 December matters

1. UK nicotine retail licensing consultation closes

Industry publication Tobacco Reporter notes that Imperial has been encouraging UK retailers to respond to a government call for evidence on a proposed retail licensing scheme for nicotine products in England, Wales and Northern Ireland. The consultation closes on 3 December 2025. ^[30]

Key points from that consultation and commentary: ^[31]

The scheme would introduce licences for selling tobacco and nicotine products, aimed at clamping down on illicit trade and under‑age access.
Imperial argues that compliant retailers should help shape the rules to ensure fair competition and practical enforcement.
Stricter licensing could raise barriers to entry and increase compliance costs, potentially favouring large incumbents such as Imperial over smaller, non‑compliant outlets.

The outcome won’t be known for some time, but today is the final day for submissions, which makes this a meaningful regulatory milestone for the UK business.

2. U.S. menthol ban off the table (for now), but vape rules bite

In the US, the regulatory picture is mixed:

Menthol cigarettes and flavoured cigars
- After years of delay, the US FDA’s proposed menthol ban was formally withdrawn in early 2025, according to specialist legal commentary and Reuters reporting. ^[32]
- Imperial’s former CEO had previously said any menthol ban would likely be “several years away”, a view that now looks conservative given the withdrawal. ^[33]
- For Imperial, which has meaningful US menthol exposure, this reduces one of the more immediate regulatory tail risks.
Flavoured vapour
- In April 2025, the U.S. Supreme Court upheld the FDA’s decision to deny authorisation for certain flavoured e‑liquids, reinforcing the regulator’s authority over flavoured vaping products. ^[34]
- This backdrop is one reason Imperial is concentrating on closed‑pod systems and tobacco‑flavoured products with its blu brand, where the regulatory path is somewhat clearer.

3. Delaware Supreme Court hearing on U.S. settlement payments

Perhaps the most technically complex risk factor is a long‑running dispute over payments under a Florida tobacco settlement, related to brands Imperial acquired from Reynolds in 2015.

From Imperial’s FY25 results statement and related filings: ^[35]

In 2015, a subsidiary (ITG Brands) acquired certain US cigarette brands from R.J. Reynolds. Florida later argued that ITG should assume certain settlement payment obligations.
A Delaware court previously ruled that ITG is liable for substantial sums, including past payments and an ongoing annual obligation.
Imperial has appealed, and oral arguments at the Delaware Supreme Court are scheduled for 3 December 2025.
The group has posted bonds and disclosed contingent liabilities but has not booked an additional provision, stating that it believes its legal arguments are strong.

The financial impact depends on the final ruling, which could take months. For now, the case is a headline risk rather than a cash‑flow reality, but investors will be watching closely.

Analyst ratings, price targets and consensus forecasts

Broker recommendations

Data compiled by broker‑tracking sites show a broadly positive but not unanimous view among sell‑side analysts: ^[36]

Citigroup: Buy, 3,650p target (24 November 2025)
Jefferies: Buy, 3,700p target (26 November 2025)
Panmure Gordon: Buy, 4,200p target (19 November 2025) ^[37]
RBC Capital Markets: Sector Perform, target raised from 2,400p to 2,700p on 20 November, following the FY25 results. ^[38]

According to one broker‑aggregator snapshot as of today: ^[39]

Average 12‑month target price: around 3,562–3,575p
Median target: roughly 3,675p
Implied upside vs current price: about 9% on the average target, before dividends
Rating mix: typically four Buys and one Hold, summarised as “Moderate Buy”

US‑listed ADR coverage mirrors this pattern, with RBC and others describing the valuation as attractive but the category as structurally challenged. ^[40]

Company‑published consensus

Imperial’s own website hosts Visible Alpha‑based consensus estimates (as of 5 November 2025), which give a structured view of how analysts see the next few years unfolding: ^[41]

At constant currency:

Tobacco & NGP net revenue growth:
- FY25: +3.0%
- FY26: +2.3%
- FY27: +2.1%
Total group adjusted operating profit growth:
- FY25: +4.3%
- FY26: +3.9%
- FY27: +3.7%

In absolute terms, consensus expects:

Adjusted operating profit rising from about £3.98bn in FY25 to £4.12bn in FY26 and £4.26bn in FY27.
Adjusted EPS climbing from 313–315p in FY25 to 343.5p in FY26 and 376.6p in FY27.

Management’s guidance for 3–5% annual operating profit growth and high‑single‑digit EPS growth over the medium term is broadly aligned with these figures. ^[42]

Technical indicators

Short‑term technical screens currently skew bullish:

Investing.com’s technical analysis dashboard shows a “Strong Buy” signal on daily indicators, with most moving averages and oscillators pointing to upside momentum. ^[43]

That said, the shares are also trading close to their 52‑week high and well above their 2023–2024 levels, which some analysts interpret as “the air getting thinner” even if fundamentals remain solid. ^[44]

Independent fundamental views: value, but not without risks

Several recent long‑form analyses have weighed in on Imperial’s investment case after the FY25 numbers:

A Seeking Alpha piece titled “Hold The Inhale After FY 2025 Results” characterises Imperial as: ^[45]
- A high‑yield, cash‑rich tobacco group with improving NGP momentum
- Trading on a low earnings multiple relative to global staples
- Still exposed to volume decline, regulation and ESG‑driven multiple compression, leading the author to a neutral/“hold” stance.
Other recent articles argue that the combination of 10%+ cash‑return yield (dividends plus buybacks), de‑risked balance sheet and modest growth is still under‑appreciated by the market, though they acknowledge that much of the easy rerating from 2020 lows has already happened. ^[46]

In short, independent commentators generally agree that:

On traditional value metrics, Imperial still looks cheap versus global consumer staples.
But there are good reasons for the discount: structural cigarette decline, policy risk, litigation, and an ESG overhang that keeps many institutions underweight the sector, regardless of valuation. TS2 Tech+2ASH > Action on Smoking & Health+2

What to watch after 3 December 2025

For investors tracking Imperial Brands from here, key watchpoints include:

Outcome of the Delaware Supreme Court appeal
- Any ruling that crystallises additional cash obligations in the US could dent the cash‑return story, though the balance sheet appears robust enough to absorb a negative outcome over time. ^[47]
Progress of the £1.45bn FY26 buyback
- Regular “transaction in own shares” RNS announcements will show how quickly Imperial is retiring stock and how that feeds through to EPS per share. ^[48]
UK nicotine licensing and tax changes
- The now‑closed consultation on retail licensing, plus forthcoming vaping excise duty from 2026, will shape the economics of both combustibles and NGP in the UK. ^[49]
NGP traction: Zone, blu and Pulze
- Category share data in the US and Europe, plus further geographic rollouts, will reveal whether NGP can become a meaningful earnings growth engine rather than just a defensive hedge. TS2 Tech+2Reuters+2
Macro and sector sentiment
- Tobacco remains deeply out of favour with many ESG‑oriented investors, but income‑hunters continue to rotate into high‑yield staples when bond markets wobble. Relative performance versus peers like BAT and Altria will be watched closely. ^[50]

Bottom line

As of 3 December 2025, Imperial Brands sits at an interesting crossroads:

Financially, it is delivering exactly what many investors want: mid‑single‑digit profit growth, a near‑5% dividend yield, aggressive buybacks, and a 10%+ cash‑return yield at a modest earnings multiple. ^[51]
Strategically, NGP is finally starting to look like a real business, not just a science project, thanks to Zone, blu and Pulze. ^[52]
Structurally, the group still depends on a declining combustible category and operates in one of the most heavily regulated consumer industries on the planet, complete with litigation risk and a constant policy overhang. ^[53]

For income‑focused investors comfortable with tobacco risk, the numbers explain why Imperial remains on many watchlists. For others, especially those with ESG or policy‑driven constraints, the stock may remain a “permanently cheap” cash generator rather than a core long‑term holding.

Either way, today’s combination of a near‑record share price, fresh buyback activity, a key court hearing and regulatory deadlines makes 3 December 2025 a meaningful checkpoint in the Imperial Brands story.