Imperial Brands Share Discussion Threads

[muscletrade] 04/9/2020 10:45

PMorgan Cazenove upgraded its rating on shares of Imperial Brands on Friday to ‘overweight217; from ‘neutral’;, as it said the current valuation is pricing in severe downside risks, leaving the risk/reward tilted strongly to the upside following the dividend cut in May.

"Supported by its robust free cash flow…we see IMB’s circa 50% payout ratio as sustainable with a further £1bn+ per annum available for cash returns or M&A from FY23e in our base case," said JPM.

The bank also said that with IMB’s valuation discounting its "listless direction", the arrival of new external chief executive Stefan Bomhard provides free optionality should he show competency and his new perspective can begin to re-build investor confidence.

JPM cut its price target on Imperial Brands to 1,650p from 1,700p.

[spud] 03/9/2020 16:42

Thanks dmore2.

Big Tobacco Is About to Dominate the E-Cig Industry
The clock is ticking down for e-cig makers to submit premarket applications to the FDA for approval.

Rich Duprey

Sep 3, 2020 at 9:00AM

The electronic cigarette industry is poised to irreversibly change next week. Manufacturers face a Sept. 9 deadline to submit premarket tobacco product applications (PMTA) to the Food & Drug Administration or face having their e-cigs and e-liquids pulled from store shelves.

Because the cost of complying with the regulations is staggeringly high, many manufacturers will not be able to make it over the hurdle, and the e-cig market will be left largely to the tobacco giants.

Crunch time
Some 650 PMTAs have been submitted to the FDA as of June, the most recent data available, but each application covers a separate product. Philip Morris International (NYSE:PM), the first company to file an application, had four separate PMTAs approved: one for its IQOS heated tobacco device and three for flavors of its disposable Heatsticks.

Although the FDA estimates a single PMTA costs anywhere from $117,000 to $466,000, those figures are considered low by the industry. The Rocky Mountain Smoke-Free Association estimates a single PMTA costs between $8.6 million and $11.1 million per stock keeping unit (SKU). It forecasts 14,000 small vape businesses employing 166,000 workers will be destroyed, representing $24 billion in economic activity.

The problem is it's not just e-cig manufacturers that need to comply with the regulations, but also manufacturers of the e-liquids the devices use, as well as the vape shops that sell them.

A disproportionate burden
Amanda Wheeler, the owner of five Jvapes vape shops in Arizona, Colorado, and Oklahoma, explained the situation this way: "Let's say I have 100 products and each of the flavors has five nicotine levels, which means five SKUs per flavor, legal and other fees will cost my stores in excess of $5.5 billion. There's not a small business owner in the United States who can afford $5.5 billion for SKU applications."

She likens the situation to what would occur to a liquor store if it had to pay and apply for every SKU in its store. "We wouldn't have liquor today," Wheeler said.

Where British American Tobacco (NYSE:BTI) and Juul Labs (which is backed by Altria (NYSE:MO)) can afford to pay such rates, the vast majority of businesses serving the industry are small ones and will find the technical hurdles difficult to surmount.

The favored few
The FDA doesn't identify companies that have submitted applications until it takes action on them. However, several other companies have applied, including Imperial Brands, which says it has submitted PMTAs for a "wide range of its myblu electronic vaping products," as well as Japan Tobacco, which submitted one for its Logic brand of e-cigs.

At least one independent vape manufacturer was also able to see it through to the end. E-Alternative Solutions, the maker of the Leap brand of devices and pods, submitted over two dozen applications for flavors and nicotine strength, as well as for its devices. Avail Vapor, one of the biggest vape shop chains (in which Altria has a minority interest), says it also has submitted PMTAs for its products.

It's possible then this small coterie of companies account for the vast majority of PMTAs submitted. With applications running several hundred thousand pages long and containing scientific studies and data to support the application, only the most well-financed company can afford to submit an application.

Up in smoke
Philip Morris, of course, is the only e-cig maker that's successfully made it all the way through, getting approval to market its IQOS as producing less harmful chemicals than cigarettes and reducing exposure to them. It gives the tobacco giant a competitive edge over even its well-heeled rivals.

At least one or two of the PMTAs others have submitted will likely be approved -- maybe even Juul, despite being excoriated regularly for its contribution to teen use of e-cigs. Without these other devices, the IQOS will have a monopoly on the market, and it seems doubtful tobacco regulators would want or allow that.

Yet the e-cig market is about to become significantly smaller in just a few days, a change that is not necessarily better for trying to wean smokers away from traditional cigarettes.

spud

[dmore2] 03/9/2020 15:56

hxxps://www.fool.com/investing/2020/09/03/big-tobacco-is-about-to-dominate-the-e-cig-industr/

[philanderer] 03/9/2020 00:11

Upbeat note from Morgan Stanley on BATS released wednesday.

[spud] 02/9/2020 14:49

BATS up 1.7% IMB up 0.2%....

Same old, same old!

spud

[zztop] 01/9/2020 11:18

SHOCK REPORT: This Week CDC Quietly Updated COVID-19 Numbers – Only 9,210 Americans Died From COVID-19 Alone – Rest Had Different Other Serious Illnesses

[zztop] 01/9/2020 11:14

Sounds like you should stay home thenFree up some space for me when I go out

[buywell3] 01/9/2020 07:59

The problem is Hospitals can only treat a limited number of Covid-19 cases at any one time

Because ICU's where the ventilators are , only have very small bed numbers and very small ICU specialist nurses

Too many cases and the whole thing breaks down = people dying in the corridors

Strict Quarantine measures control case numbers

[spud] 30/8/2020 11:32

If we don't get this country back to work, there won't be any schools (or much else for that matter) to spread the flu! spud

[loganair] 30/8/2020 08:13

1. Children under 10/12 were thought not to really spread the virus, this is because they have not been out and about in a position to spread the virus.

2. Since schools have started to reopen in the USA, it has been found that Asymptomatic children under 10/12 are the biggest spreaders of Covid.

[tombag] 30/8/2020 02:22

warranty: 'kids neither contract it nor transmit it' : Are you sure? I have heard differently. And what about teenagers? And what about vulnerable people don't they matter to you?

[buywell3] 30/8/2020 00:58

Ignorance is bliss for some it seems

Coronavirus: Vaping teens and young adults up to seven times more likely to contract COVID-19, study finds






Plus the young are now catching a different form of Covid-19 as it has mutated


This new disease MIS-C is in the USA and UK and EU now , plus



Study: Coronavirus cases in children rise sharply in the second half of July, with more than 97,000 infections


Also younger adults are catching new mutations --- SARS-CoV-2 is evolving so it can enter all human formats. It is not choosy

Children are also super spreaders of the virus

[warranty] 29/8/2020 11:41

But we’ll, concern over CV-19 will be gone by March next year as the facts become clear that almost the entire working age community is at little risk of suffering from it and almost no chance of hospitalisation or death. We already know kids neither contract it nor transmit it and only doomsayers like you keep denying what’s becoming increasingly obvious to the more intelligent of us.

[buywell3] 28/8/2020 20:32

IMO anyone going V this chart is a plonker

In a Covid-19 world for years to come IMO

Smoking and Vaping are to be considered in a bad light

Debt is a massive issue ignore it IMO at your peril

dyor

[action] 28/8/2020 20:24

Nearly reaching the bottom of March20. Good entry point for continuous divi.

[gregmorg] 28/8/2020 10:48

I have concluded management appears =to be incapable of identifying their issues or indeed managing a plc. They are just not up to the job!

[1airbag] 24/8/2020 13:01

dmore2 - I agree, there becomes a tipping point where people can't resist the returns + the added safety on share price of buying well below true value.

Having said that, I don't think it will be long before some of the major ftse100 firms resume paying decent divis again

[dmore2] 24/8/2020 12:31

As more and more dividend yields evaporate, morals will go out the window to find a regular income stream.

[dogwalker] 24/8/2020 12:20

Thanks for that, 1airbag.

[1airbag] 24/8/2020 11:50

I bought a few friday.

It is an investment which many will never even consider due to the moral issues associated with smoking and tobacco.

I have to admit I still feel uneasy about my decision.

This is why the share is undervalued IMHO.

Some funds wouldn't go near it for that reason.

The BOD know this and need to offer good incentives/divis for investors to be persuaded to purchase.

[gaffer73] 22/8/2020 16:00

EPS is 55p for the half year, if we assume the same for the next half PE is approx 11, not unusually low or high really.

[minerve 2] 22/8/2020 13:23

I don't see the rationale to not make all 4 dividends even. Over engineering a problem. British American Tobacco don't seem to have an issue about this. What's going on?