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Imperial Brands share price: what’s the latest after Donald Trump threatens to ban vaping?

The British multinational tobacco company has had a relatively strong 2019, with growth driven by its e-cigarette brand Blu. But with US President Donald Trump threatening to ban vaping it could hurt its top line.

Earlier this month, US President Donald Trump threatened to ban vaping after a series of deaths allegedly linked to the alternative tobacco product.

The news comes at a time when the tobacco industry is attempting to cut costs and shift focus towards vaping products as sales struggle amid tighter rules on traditional tobacco – hampering tobacco stocks.

Imperial Brands share price fell more than 20% between January and the end of May, but has since rallied more than 15%, closing at £21.44 on Tuesday’s session, with its gains primarily driven by vape-related products.

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Imperial Brands sees sales growth driven by vaping products

In its first half of trading this year, Imperial Brands saw its tobacco sales performance enhanced by growing contribution of its next generation products (NGP) business, with overall revenues up 2.5%, while Europe and the Americas both grew sales by 4%.

‘In tobacco, we continue to focus on our longstanding brand and market priorities, and are delivering high margin sales growth,’ Imperial Brands CEO Alison Cooper said.

‘Our Asset Brands continue to outperform and now represent two thirds of our revenue. We have made significant progress in building our NGP business with investment behind myblu generating awareness and consumer adoption, resulting in leading retail shares in most markets,’ she added.

Imperial Brands full-year guidance unchanged

Investors will be hoping that Trump is simply blowing hot air and will back away from imposing even more stringent rules on the already incumbered tobacco industry.

If he does, Imperial Brands will likely hit its sales targets in the US market, with the business leaving its full-year revenue, earnings and cash generation guidance unchanged this year.

In NGP products, investment behind Imperial Brands’ Blu adoption model is driving awareness, trial and repurchase of the product, which will help accelerate growth in the second half of the year, the company said.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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