Analyst Note| Philip Gorham, CFA, FRM |
Imperial Brands released reasonably strong full year results for fiscal 2020. Both volume and margins were ahead of our expectations. We continue to regard Imperial as being materially undervalued, and although this stable trading performance and guidance of modest profit growth next year is good news, we think it will take the communication of clear strategies to increase price/mix in the cigarettes portfolio and to gain share in next generation products for the upside to the market value to be realised. We retain our GBX 3,400 fair value estimate.