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| Datum / Uhrzeit |
Titel |
Bewertung |
| 14.08.25 14:18:40 |
Ist Imperial Brands PLC's (LON:IMB) ROE von 49% Beeindruckend? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Here's a 400-word summary of the text, followed by the German translation:
**Summary:**
This article explores how Return on Equity (ROE) can be used to evaluate a company’s investment performance. It uses Imperial Brands PLC (LON: IMB) as a practical example. ROE measures a company’s profitability relative to shareholder equity – essentially, how efficiently it’s using invested capital.
The analysis reveals that Imperial Brands has an impressive ROE of 49%, calculated as UK£2.7 billion in profit divided by UK£5.5 billion in shareholders’ equity (trailing twelve months to March 2025). This indicates that for every £1 invested by shareholders, the company generates £0.49 in profit.
Importantly, the article emphasizes comparing a company’s ROE to its industry average. Imperial Brands’ 49% is significantly higher than the 24% average in the tobacco industry, suggesting superior operational efficiency.
However, the analysis cautions that a high ROE isn’t inherently positive. The company utilizes a considerable amount of debt (a debt-to-equity ratio of 1.90) to boost returns. This leverage artificially inflates ROE, but it also introduces greater risk. High debt limits the company’s future options and makes it vulnerable to economic downturns.
The text explains that companies often use debt to fuel growth, which can increase ROE without directly impacting shareholder equity. However, managing debt strategically is crucial. A high ROE achieved through excessive debt doesn't guarantee a good investment, as it significantly raises the company's risk profile.
Ultimately, the article stresses that ROE is just one piece of the puzzle when assessing an investment. Factors like future profit growth expectations and the current stock price are also vital considerations. The ideal investment scenario would be a company with a high ROE and low debt.
**German Translation:**
**Imperial Brands’ Rendite – Eine Analyse**
Dieser Artikel untersucht, wie die Rendite auf das Eigenkapital (ROE) zur Bewertung der Investitionspotenzial eines Unternehmens verwendet werden kann. Imperial Brands PLC (LON: IMB) wird als praktisches Beispiel herangezogen. ROE misst die Rentabilität eines Unternehmens im Verhältnis zum Eigenkapital – d. h. wie effizient das investierte Kapital genutzt wird.
Die Analyse zeigt, dass Imperial Brands einen beeindruckenden ROE von 49% aufweist, berechnet als 2,7 Milliarden £ an Gewinn geteilt durch 5,5 Milliarden £ an Eigenkapital (auf die letzten zwölf Monate bis März 2025). Dies bedeutet, dass für jeden £1, der von Aktionären investiert wird, das Unternehmen 0,49 £ Gewinn erwirtschaftet.
Wichtig ist, dass die Analyse den ROE eines Unternehmens mit dem Durchschnitt seiner Branche vergleicht. Der von Imperial Brands erreichte Wert von 49 % liegt deutlich über dem Branchendurchschnitt von 24 %, was eine bessere betriebliche Effizienz anzeigt.
Allerdings warnt die Analyse, dass ein hoher ROE nicht unbedingt positiv ist. Das Unternehmen verwendet einen erheblichen Schuldenstand (ein Schulden-zu-Eigenkapital-Verhältnis von 1,90), um die Erträge zu steigern. Dieser Buchschlag erhöht künstlich den ROE, birgt aber auch ein höheres Risiko. Eine hohe Verschuldung schränkt die zukünftigen Optionen des Unternehmens ein und macht es anfälliger für wirtschaftliche Abschwünge.
Der Text erklärt, dass Unternehmen Schulden nutzen, um das Wachstum anzukurbeln, was den ROE ohne direkte Beeinflussung des Eigenkapitals erhöht. Allerdings ist eine strategische Schuldenverwaltung entscheidend. Ein hoher ROE, der durch übermäßige Verschuldung erreicht wird, garantiert keine gute Investition, da er das Risikoprofil des Unternehmens erheblich erhöht.
Letztendlich betont der Artikel, dass ROE nur ein Teil des Puzzles ist, wenn eine Investition bewertet wird. Auch die erwarteten zukünftigen Gewinnwachstumsraten und der aktuelle Aktienkurs müssen berücksichtigt werden. |
| 31.07.25 06:27:01 |
BATs erste Hälfte Gewinn schlägt Schätzungen, US-Geschäft kehrt zum Wachstum zurück |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
(Reuters) -British American Tobacco meldete am Donnerstag einen Anstieg des ersten Halbjahresgewinns bei konstanter Währung um 1,7%, die Erwartungen schlagen, durch eine Rückkehr zum Wachstum seines Unternehmens in den Vereinigten Staaten und die Nachfrage nach seiner Velo Nikotinbeutel.
BAT und Peers wie Philip Morris, Imperial Brands und Altria versuchen, einen größeren Anteil an den Vaporen, Tabakheizprodukten und orale Nikotinbeutel-Markt zu erfassen, um den rückläufigen Absatz von traditionellen Tabakprodukten zu kompensieren.
Der Hersteller von Lucky Strike und Dunhill Zigaretten sagte, Umsatz in den USA wuchs 3,7% in konstanter Währung, mit Velo hilft Verkäufe seiner neuen Kategorien Produkte steigen 3,9%.
Es berichtete über ein bereinigtes verwässertes Ergebnis von 162 Pence pro Aktie für die sechs Monate bis zum 30. Juni, verglichen mit 159,4 Pence pro Jahr, und einen unternehmensgeförderten Konsens von 154,8 Pence.
(Bericht von Shashwat Awasthi in Bengaluru; Redaktion von Janane Venkatraman und Mrigank Dhaniwala)
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| 17.04.25 16:00:02 |
Imperial Tobacco Group PLC (IMBBY) is a Great Momentum Stock: Should You Buy? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the 'long' context, investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Imperial Tobacco Group PLC (IMBBY), a company that currently holds a Momentum Style Score of B. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Imperial Tobacco Group PLC currently has a Zacks Rank of #2 (Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of A or B outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market?
Let's discuss some of the components of the Momentum Style Score for IMBBY that show why this company shows promise as a solid momentum pick.
Looking at a stock's short-term price activity is a great way to gauge if it has momentum, since this can reflect both the current interest in a stock and if buyers or sellers have the upper hand at the moment. It's also helpful to compare a security to its industry; this can show investors the best companies in a particular area.
For IMBBY, shares are up 4.78% over the past week while the Zacks Tobacco industry is up 2.48% over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 10.22% compares favorably with the industry's 1.55% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of Imperial Tobacco Group PLC have risen 22.19%, and are up 77.71% in the last year. On the other hand, the S&P 500 has only moved -10.88% and 5.91%, respectively.
Story Continues
Investors should also take note of IMBBY's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. Right now, IMBBY is averaging 159,373 shares for the last 20 days.
Earnings Outlook
The Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with IMBBY.
Over the past two months, 1 earnings estimate moved higher compared to none lower for the full year. These revisions helped boost IMBBY's consensus estimate, increasing from $4.09 to $4.13 in the past 60 days. Looking at the next fiscal year, 1 estimate has moved upwards while there have been no downward revisions in the same time period.
Bottom Line
Given these factors, it shouldn't be surprising that IMBBY is a #2 (Buy) stock and boasts a Momentum Score of B. If you're looking for a fresh pick that's set to soar in the near-term, make sure to keep Imperial Tobacco Group PLC on your short list.
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Imperial Tobacco Group PLC (IMBBY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
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| 17.04.25 13:40:08 |
Is Imperial Tobacco Group (IMBBY) Stock Undervalued Right Now? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Imperial Tobacco Group (IMBBY). IMBBY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.86. This compares to its industry's average Forward P/E of 14.43. IMBBY's Forward P/E has been as high as 8.86 and as low as 5.48, with a median of 6.89, all within the past year.
Investors will also notice that IMBBY has a PEG ratio of 0.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IMBBY's industry has an average PEG of 2.58 right now. Over the last 12 months, IMBBY's PEG has been as high as 1.03 and as low as 0.73, with a median of 0.82.
Another valuation metric that we should highlight is IMBBY's P/B ratio of 4.21. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. IMBBY's current P/B looks attractive when compared to its industry's average P/B of 6.52. Over the past 12 months, IMBBY's P/B has been as high as 4.21 and as low as 2.90, with a median of 3.57.
Value investors will likely look at more than just these metrics, but the above data helps show that Imperial Tobacco Group is likely undervalued currently. And when considering the strength of its earnings outlook, IMBBY sticks out at as one of the market's strongest value stocks.
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Imperial Tobacco Group PLC (IMBBY) : Free Stock Analysis Report
Story Continues
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
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| 17.04.25 13:40:08 |
Is Imperial Tobacco Group (IMBBY) Outperforming Other Consumer Staples Stocks This Year? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
The Consumer Staples group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Imperial Tobacco Group PLC (IMBBY) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Staples sector should help us answer this question.
Imperial Tobacco Group PLC is one of 177 individual stocks in the Consumer Staples sector. Collectively, these companies sit at #8 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. Imperial Tobacco Group PLC is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for IMBBY's full-year earnings has moved 1% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the latest available data, IMBBY has gained about 22.2% so far this year. In comparison, Consumer Staples companies have returned an average of 4.7%. This shows that Imperial Tobacco Group PLC is outperforming its peers so far this year.
Another stock in the Consumer Staples sector, Nestle SA (NSRGY), has outperformed the sector so far this year. The stock's year-to-date return is 27.8%.
For Nestle SA, the consensus EPS estimate for the current year has increased 1.5% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, Imperial Tobacco Group PLC is a member of the Tobacco industry, which includes 6 individual companies and currently sits at #89 in the Zacks Industry Rank. On average, stocks in this group have gained 24.7% this year, meaning that IMBBY is slightly underperforming its industry in terms of year-to-date returns.
On the other hand, Nestle SA belongs to the Consumer Products - Staples industry. This 37-stock industry is currently ranked #142. The industry has moved +0.9% year to date.
Going forward, investors interested in Consumer Staples stocks should continue to pay close attention to Imperial Tobacco Group PLC and Nestle SA as they could maintain their solid performance.
Story Continues
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Imperial Tobacco Group PLC (IMBBY) : Free Stock Analysis Report
Nestle SA (NSRGY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research |
| 13.04.25 07:02:18 |
Imperial Brands (LON:IMB) Will Pay A Dividend Of £0.4008 |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
The board of Imperial Brands PLC (LON:IMB) has announced that it will pay a dividend on the 30th of June, with investors receiving £0.4008 per share. This takes the annual payment to 5.3% of the current stock price, which is about average for the industry.
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Imperial Brands' Projected Earnings Seem Likely To Cover Future Distributions
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. The last dividend was quite easily covered by Imperial Brands' earnings. This indicates that quite a large proportion of earnings is being invested back into the business.
Over the next year, EPS is forecast to expand by 14.6%. Assuming the dividend continues along recent trends, we think the payout ratio could be 47% by next year, which is in a pretty sustainable range.LSE:IMB Historic Dividend April 13th 2025
Check out our latest analysis for Imperial Brands
Dividend Volatility
Although the company has a long dividend history, it has been cut at least once in the last 10 years. The annual payment during the last 10 years was £1.28 in 2015, and the most recent fiscal year payment was £1.53. This means that it has been growing its distributions at 1.8% per annum over that time. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it's even more important to see if earnings per share is growing. We are encouraged to see that Imperial Brands has grown earnings per share at 25% per year over the past five years. Imperial Brands is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.
Imperial Brands Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 3 warning signs for Imperial Brands (1 shouldn't be ignored!) that you should be aware of before investing. Is Imperial Brands not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 01.04.25 13:40:12 |
Should Value Investors Buy Imperial Tobacco Group (IMBBY) Stock? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Imperial Tobacco Group (IMBBY). IMBBY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.29. This compares to its industry's average Forward P/E of 13.97. Over the past 52 weeks, IMBBY's Forward P/E has been as high as 8.46 and as low as 5.38, with a median of 6.85.
IMBBY is also sporting a PEG ratio of 0.91. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. IMBBY's PEG compares to its industry's average PEG of 2.41. IMBBY's PEG has been as high as 1.03 and as low as 0.73, with a median of 0.82, all within the past year.
Investors should also recognize that IMBBY has a P/B ratio of 4.01. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 6.51. Over the past 12 months, IMBBY's P/B has been as high as 4.01 and as low as 2.44, with a median of 3.55.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Imperial Tobacco Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IMBBY feels like a great value stock at the moment.
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Story Continues
Imperial Tobacco Group PLC (IMBBY) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
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| 01.04.25 13:40:09 |
Are Consumer Staples Stocks Lagging Imperial Tobacco Group (IMBBY) This Year? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
The Consumer Staples group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has Imperial Tobacco Group PLC (IMBBY) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Consumer Staples sector should help us answer this question.
Imperial Tobacco Group PLC is a member of the Consumer Staples sector. This group includes 177 individual stocks and currently holds a Zacks Sector Rank of #14. The Zacks Sector Rank includes 16 different groups and is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors.
The Zacks Rank is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. Imperial Tobacco Group PLC is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for IMBBY's full-year earnings has moved 2% higher. This is a sign of improving analyst sentiment and a positive earnings outlook trend.
Our latest available data shows that IMBBY has returned about 15.8% since the start of the calendar year. Meanwhile, stocks in the Consumer Staples group have gained about 7% on average. This means that Imperial Tobacco Group PLC is performing better than its sector in terms of year-to-date returns.
Another Consumer Staples stock, which has outperformed the sector so far this year, is WK Kellogg (KLG). The stock has returned 10.8% year-to-date.
Over the past three months, WK Kellogg's consensus EPS estimate for the current year has increased 7%. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, Imperial Tobacco Group PLC is a member of the Tobacco industry, which includes 6 individual companies and currently sits at #169 in the Zacks Industry Rank. Stocks in this group have gained about 23.4% so far this year, so IMBBY is slightly underperforming its industry this group in terms of year-to-date returns.
On the other hand, WK Kellogg belongs to the Consumer Products - Staples industry. This 37-stock industry is currently ranked #148. The industry has moved +5.1% year to date.
Investors with an interest in Consumer Staples stocks should continue to track Imperial Tobacco Group PLC and WK Kellogg. These stocks will be looking to continue their solid performance.
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Story Continues
Imperial Tobacco Group PLC (IMBBY) : Free Stock Analysis Report
WK Kellogg Co. (KLG) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
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| 01.04.25 07:04:04 |
Are Investors Undervaluing Imperial Brands PLC (LON:IMB) By 50%? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Key Insights
Imperial Brands' estimated fair value is UK£57.01 based on 2 Stage Free Cash Flow to Equity Current share price of UK£28.65 suggests Imperial Brands is potentially 50% undervalued Analyst price target for IMB is UK£29.89 which is 48% below our fair value estimate
How far off is Imperial Brands PLC (LON:IMB) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by projecting its future cash flows and then discounting them to today's value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.
The Calculation
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value:
10-year free cash flow (FCF) estimate
2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (£, Millions) UK£2.85b UK£2.93b UK£3.01b UK£2.96b UK£2.67b UK£2.64b UK£2.64b UK£2.65b UK£2.68b UK£2.72b Growth Rate Estimate Source Analyst x4 Analyst x4 Analyst x4 Analyst x1 Analyst x1 Est @ -1.26% Est @ -0.19% Est @ 0.56% Est @ 1.08% Est @ 1.45% Present Value (£, Millions) Discounted @ 7.3% UK£2.7k UK£2.5k UK£2.4k UK£2.2k UK£1.9k UK£1.7k UK£1.6k UK£1.5k UK£1.4k UK£1.3k
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = UK£19b
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After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.3%.
Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = UK£2.7b× (1 + 2.3%) ÷ (7.3%– 2.3%) = UK£55b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= UK£55b÷ ( 1 + 7.3%)10= UK£27b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is UK£47b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of UK£28.7, the company appears quite undervalued at a 50% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.LSE:IMB Discounted Cash Flow April 1st 2025
Important Assumptions
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Imperial Brands as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.3%, which is based on a levered beta of 0.977. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
View our latest analysis for Imperial Brands
SWOT Analysis for Imperial Brands
Strength
Earnings growth over the past year exceeded the industry.
Debt is well covered by earnings and cashflows.
Dividends are covered by earnings and cash flows.
Weakness
Dividend is low compared to the top 25% of dividend payers in the Tobacco market.
Opportunity
Good value based on P/E ratio and estimated fair value.
Threat
Annual earnings are forecast to decline for the next 3 years.
Moving On:
Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. DCF models are not the be-all and end-all of investment valuation. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Can we work out why the company is trading at a discount to intrinsic value? For Imperial Brands, we've put together three relevant aspects you should explore:
Risks: Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Imperial Brands (at least 1 which is concerning) , and understanding these should be part of your investment process. Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for IMB's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the LSE every day. If you want to find the calculation for other stocks just search here.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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| 07.03.25 13:39:26 |
Can Imperial Brands PLC (LON:IMB) Maintain Its Strong Returns? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we'll use ROE to better understand Imperial Brands PLC (LON:IMB).
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In simpler terms, it measures the profitability of a company in relation to shareholder's equity.
View our latest analysis for Imperial Brands
How Is ROE Calculated?
ROE can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Imperial Brands is:
46% = UK£2.7b ÷ UK£6.0b (Based on the trailing twelve months to September 2024).
The 'return' is the profit over the last twelve months. That means that for every £1 worth of shareholders' equity, the company generated £0.46 in profit.
Does Imperial Brands Have A Good ROE?
By comparing a company's ROE with its industry average, we can get a quick measure of how good it is. Importantly, this is far from a perfect measure, because companies differ significantly within the same industry classification. As you can see in the graphic below, Imperial Brands has a higher ROE than the average (12%) in the Tobacco industry.LSE:IMB Return on Equity March 7th 2025
That's clearly a positive. Bear in mind, a high ROE doesn't always mean superior financial performance. Especially when a firm uses high levels of debt to finance its debt which may boost its ROE but the high leverage puts the company at risk. To know the 3 risks we have identified for Imperial Brands visit our risks dashboard for free.
Why You Should Consider Debt When Looking At ROE
Companies usually need to invest money to grow their profits. The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. Thus the use of debt can improve ROE, albeit along with extra risk in the case of stormy weather, metaphorically speaking.
Combining Imperial Brands' Debt And Its 46% Return On Equity
Imperial Brands does use a high amount of debt to increase returns. It has a debt to equity ratio of 1.51. There's no doubt the ROE is impressive, but it's worth keeping in mind that the metric could have been lower if the company were to reduce its debt. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
Story Continues
Conclusion
Return on equity is useful for comparing the quality of different businesses. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have around the same level of debt to equity, and one has a higher ROE, I'd generally prefer the one with higher ROE.
But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings. The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too. So I think it may be worth checking this freereport on analyst forecasts for the company.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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