Imperial Brands PLC shares head into the Dec. 20 weekend with investors focused on three fresh threads: an updated credit view from Fitch, a steady drumbeat of share buybacks under the company’s new £1.45 billion programme, and a forward outlook that still leans heavily on the tobacco cash machine while “next generation products” (NGP) scale from a smaller base.
The stock is hovering around the 3,176p area, within a 52-week band that’s stretched roughly from the mid‑2,500s to the low‑3,300s. [1]
What’s new on Imperial Brands stock as of 20 December 2025
1) Fitch reaffirms ‘BBB’ with a Stable outlook
Late-week credit news landed with Fitch affirming Imperial Brands at ‘BBB’ and keeping the Outlook Stable. Fitch’s rationale is basically the company’s long-running superpower: combustible tobacco throws off cash even in slow decline, because pricing can offset falling volumes—at least for a long while. Fitch also flagged Imperial’s “disciplined capital allocation” and “prudent financial policy” as key supports, especially given the mature-growth profile of the core business. [2]
Two details in the Fitch note are particularly “stock-relevant”:
- NGP is growing fast, but still small. Fitch points out that NGP was about 4.4% of total revenue in FY25, and expects cigarettes to remain over 90% of total revenue by FY28—even while NGP contributes a meaningful share of incremental growth. [3]
- A litigation-linked cash outflow is in the model. Fitch’s assumptions include an estimated $400 million payment in 2026 connected to the long-running dispute tied to the 2015 Reynolds American brand purchase (Winston, Kool, Salem, Maverick). [4]
In plain English: Fitch is comfortable with Imperial’s balance-sheet posture because cash generation is strong and leverage targets look conservative, but it’s not ignoring the “tobacco weirdness” (regulatory and legal event-risk).
2) Buyback execution continues—almost daily in December
Imperial’s £1.45 billion FY26 share buyback is not a press-release promise sitting on a shelf. It’s actively being executed via on-market purchases, with multiple December transactions disclosed through the London Stock Exchange RNS flow.
- 19 Dec 2025: Imperial bought 167,257 shares for cancellation at an average 3,182.85p, leaving 797,115,557 shares in issue (excluding treasury shares) after settlement/cancellation. [5]
- 18 Dec 2025: Imperial bought 221,485 shares for cancellation at an average 3,181.71p, leaving 797,282,814 shares in issue (excluding treasury). [6]
Buybacks matter for Imperial Brands because the investment case is still, unapologetically, cash returns: dividends plus shrinking the share count to support earnings per share (EPS) even when the underlying category is structurally declining.
3) Executive share dealings disclosed—primarily tax/award related
Imperial also published an RNS detailing share transfers and sales by senior executives tied to the vesting of awards and sales to cover tax obligations. These kinds of disclosures often get misread as “bearish insider selling,” but the stated purpose here is clearly linked to deferred bonus plan mechanics and tax. [7]
4) Debt housekeeping: early redemption of €650 million notes
On the financing side, Imperial Brands Finance PLC announced it will redeem €650 million of 3.375% Guaranteed Notes on 30 Dec 2025, ahead of the original February 2026 maturity, exercising a call option and paying par plus accrued interest. [8]
That’s not a “growth catalyst,” but it’s consistent with the broader message investors have been rewarding: keep the capital structure tidy, defend flexibility, and keep funding shareholder returns.
The fundamental backdrop: FY25 results and management’s FY26 direction of travel
Imperial’s latest full-year report (FY25, year ended 30 Sept 2025) reinforced the core narrative:
- Tobacco & NGP net revenue:£8.316bn, up 4.1% at constant currency
- Group adjusted operating profit:£3.988bn, up 4.6% at constant currency
- Adjusted EPS:315.0p, up 9.1% at constant currency
- Free cash flow:£2.7bn
- Dividend per share:160.32p, up 4.5%
- NGP net revenue: up 13.7% (with NGP net revenue shown around £368m) [9]
Management also reiterated the near-term playbook: low-single-digit growth in tobacco net revenue on pricing, and double-digit growth in NGP net revenue as the portfolio scales. [10]
A quick, practical translation for investors: even if volumes drift down, Imperial is betting it can price strongly enough (and cut enough costs / buy back enough stock) to keep EPS rising—while NGP gradually becomes “large enough to matter” rather than “small but promising.”
The company’s own consensus snapshot: what analysts (as a group) model next
Imperial publishes a consensus table (compiled from external analyst forecasts). As of the early-November consensus snapshot, analysts were modelling:
- Tobacco & NGP revenue: about £8.368bn in FY26 and £8.528bn in FY27
- NGP revenues:£426m in FY26, £483m in FY27
- Adjusted EPS:343.5p in FY26, 376.6p in FY27
- Tobacco volumes: declining from 183.5bn (FY25) to 176.4bn (FY26) to 169.3bn (FY27) [11]
Those figures are useful because they show the market’s “base case”: volumes down, profits up anyway, with buybacks and margins doing a lot of the heavy lifting.
Street targets and “where the bar is” for IMB shares
Across widely tracked broker/aggregator snapshots, Imperial Brands is generally framed as a Buy / Overweight-leaning name with mid‑single to low‑double digit upside baked into average price targets.
- One consensus view puts the average 12‑month price target around 3,446p (high roughly 4,200p; low roughly 2,700p). [12]
- Another similar snapshot places the average target around 3,545p, again with highs near 4,200p and lows near 2,700p. [13]
With the share price around 3,176p, that implies something like high single-digit to low double-digit “consensus upside,” before dividends. [14]
And dividends are not a footnote here. Using the FY25 dividend of 160.32p and a ~3,176p share price, the trailing dividend yield is roughly 5% (math, not magic). [15]
Risks investors are watching right now
Regulation: tightening rules on nicotine products, unevenly across markets
Tobacco is always regulated; the only surprise is which lever gets pulled next.
UK direction of travel: The UK government’s Tobacco and Vapes Bill framework includes powers aimed at limiting youth appeal—potentially restricting flavours/ingredients and setting nicotine-related limits, alongside the proposed “smoke-free generation” approach. [16]
This matters to Imperial because it owns the blu vape brand and is building a broader NGP footprint alongside combustibles.
Nicotine pouches: New research coverage in the UK has highlighted a sharp increase in oral nicotine pouch use (especially among younger cohorts) and calls for tighter age/marketing restrictions. [17]
At the same time, in the US, the FDA has been authorizing specific nicotine pouch products—supporting category legitimacy but also intensifying competition as more products clear regulatory review. [18]
US combustible regulation: less pressure on menthol (for now), but not a free pass
A major US overhang—an FDA menthol cigarette ban—was officially withdrawn in early 2025, easing one pathway of near-term regulatory shock to cigarette economics. [19]
Meanwhile, tobacco companies (including Imperial’s US unit) have also seen US litigation around cigarette warning labels continue to evolve, with a federal judge blocking an FDA graphic warning label requirement that had been scheduled to take effect in February 2026. [20]
This doesn’t mean “regulatory risk is gone.” It means the risk is messy, political, and time-shifted, rather than a clean, immediate cliff.
Litigation: the Reynolds/ITG payment dispute remains a live variable
Imperial’s US subsidiary ITG Brands was ordered by a Delaware judge to pay $251.5 million to Reynolds American tied to a Florida tobacco settlement dispute connected to the 2015 brand sale; ITG has said it plans to appeal. [21]
Fitch’s mention of an estimated $400 million payment in 2026 underscores that credit analysts still treat this as potentially cash-material, even if timing and final amounts can move. [22]
The IMB stock thesis in one sentence, and why it’s still working
Imperial Brands remains a “cash-return compounding machine” thesis: price the cigarette pack, defend share in core markets, keep NGP growing, and return a lot of cash via dividends and buybacks. That’s why you see the market reacting to buyback execution, credit stability, and incremental NGP progress more than it reacts to day-to-day tobacco headlines.
Fitch’s view aligns with that framing: stable combustibles plus disciplined policy, with NGP growth contributing—just not yet dominating. [23]
What to watch next for Imperial Brands shares
As the market heads into year-end and investors position for 2026, the most practical catalysts and checkpoints are:
- Buyback pace and completion progress under the £1.45bn FY26 programme (regular RNS updates make this unusually transparent). [24]
- NGP momentum vs. expectations (Imperial’s own consensus expects NGP revenue to keep stepping up through FY26–FY27). [25]
- Regulatory implementation risk in the UK/EU for vapes and modern oral products, where flavour/nicotine restrictions could reshape product economics. [26]
- Any litigation milestones affecting the ITG/Reynolds dispute and potential cash timing. [27]
- Balance-sheet actions like the early debt redemption—signals of how management is thinking about flexibility versus returns. [28]
Imperial Brands stock rarely trades like a “story stock.” It trades like a policy-and-cash-flow stock—and as of Dec. 20, 2025, the newsflow (BBB reaffirmation, active buybacks, and continued NGP scaling) is broadly consistent with the market treating IMB as a high-cash-return defensive compounder rather than a growth moonshot. [29]
References
1. www.investing.com, 2. www.tradingview.com, 3. www.tradingview.com, 4. www.tradingview.com, 5. www.investegate.co.uk, 6. www.investegate.co.uk, 7. www.investegate.co.uk, 8. www.investing.com, 9. www.investegate.co.uk, 10. www.investegate.co.uk, 11. www.imperialbrandsplc.com, 12. www.investing.com, 13. www.tipranks.com, 14. www.investing.com, 15. www.investegate.co.uk, 16. www.gov.uk, 17. www.theguardian.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. www.reuters.com, 22. www.tradingview.com, 23. www.tradingview.com, 24. www.investegate.co.uk, 25. www.imperialbrandsplc.com, 26. www.gov.uk, 27. www.reuters.com, 28. www.investing.com, 29. www.tradingview.com
