|Bid||2,165.50 x 0|
|Ask||2,166.50 x 0|
|Day's Range||2,144.50 - 2,166.00|
|52 Week Range||1,821.40 - 2,789.00|
|Beta (3Y Monthly)||1.19|
|PE Ratio (TTM)||13.28|
|Earnings Date||Nov 5, 2019|
|Forward Dividend & Yield||1.25 (5.68%)|
|1y Target Est||3,018.82|
Today we are going to look at Imperial Brands PLC (LON:IMB) to see whether it might be an attractive investment...
(Bloomberg Opinion) -- Something must be done. That’s often the response to a big deal like the planned $200 billion union between cigarette makers Philip Morris International Inc. and Altria Group Inc. For the duo’s competitors overseas, the temptation will be to indulge in some copycat dealmaking. In reality, bulking up would be a bad way to address their strategic challenges.There is some commercial logic in the tie-up of the two U.S. tobacco giants given their complementary businesses: each have sought to expand into alternative tobacco products in different ways. Altria took a minority stake in vaping group JUUL Labs Inc., while Philip Morris developed its IQOS system for heating rather than burning tobacco. Altria is focused solely on the U.S., Philip Morris on the rest of the world.Cost savings may be limited, but integration should be simple. Together, the pair can cross-sell some of their products in each other’s markets. By definition, there is no antitrust hurdle. It is harder to make comparable arguments for any combination involving British American Tobacco Plc, Japan Tobacco Inc. and Imperial Brands Plc.For BAT, which has a market value of 65 billion pounds ($79 billion), the appeal of a takeover of domestic rival Imperial, capitalized at 20 billion pounds, would merely be opportunistic and financial. Imperial’s shares have a dividend yield of more than 10%, a sign investors expect the annual payout will decline. The company’s net debt is forecast to fall to below three times Ebitda this year, whereas BAT’s net borrowings are expected to touch 3.6 times the same measure of profit. An all-share deal would therefore slightly improve BAT’s leverage and generate some cost savings from cutting duplicate functions.But such a transaction wouldn’t transform BAT’s position in tobacco alternatives. A slightly stronger financial position would be a modest benefit set beside the distraction of the integration and the likely need to make disposals to assuage antitrust concerns.Japan Tobacco, worth $42 billion, is substantially less geared, so an all-paper deal would achieve more in terms of reducing indebtedness. But it, too, could present antitrust issues for BAT. The presence of the Japanese government as lead shareholder would also be a complicating factor. It’s true both Imperial and Japan Tobacco are developing less risky tobacco products. But so, too, is BAT.One idea is that Japan Tobacco and BAT carve up Imperial’s geographical empire between them. The main outcome would, however, be to expand in conventional cigarettes. The wildcard buyer is Beijing-based China National Tobacco Corp.The only compelling M&A transaction would be one that enabled these companies to redeploy large parts of their manufacturing, marketing and distribution assets into products that weren’t just less harmful, but actually harmless. No banker has come up with that yet.The combination of Philip Morris and Altria may nudge others elsewhere toward M&A at some point. For now, the market’s caution around the mooted U.S. tie-up suggests the effect is going to be marginal. Don’t hold your breath for more deals.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Ontario will triple its pot-store count beginning in October, just two months before the introduction of new product formats that are expected to significantly boost sales in Canada’s most-populous province.While chatter about the next wave of legalization in Canada tends to focus on products like edibles and beverages, many of the biggest players entering the space say consumers will opt for the more conventional format of vapes.The Canadian market for vapes could be as big as C$600 million ($451 million) by 2021, according to Tim Pellerin, Pax Labs Inc.’s general manager of Canada.San Francisco-based Pax, which split from e-cigarette company Juul Labs Inc. in 2017 to focus on cannabis, captures about 17% of the U.S. market for pot vape devices. It’s the top seller in the extremely fragmented market, and hopes to capture at least as much share in Canada. Pax has partnered with Aphria Inc., Aurora Cannabis Inc., Organigram Holdings Inc. and Supreme Cannabis Co. to sell their oils in its devices.“We’ll be disappointed if we’re not able to match or exceed our performance in the U.S. market” in Canada, Pellerin said in an interview.It’s shaping up to be a fierce fight, with two tobacco giants joining the fray via investments in Canadian pot companies.Marlboro-maker Altria Group Inc. bought a 45% stake in Cronos Group Inc. via a C$2.4 billion investment that closed in March, while Imperial Brands Plc announced last month that it will invest C$123 million in Auxly Cannabis Group Inc. by way of a convertible debenture.Imperial decided to invest in cannabis after conducting a strategic review to identify new opportunities to offset declining tobacco sales, according to Chief Financial Officer Oliver Tant.“It’s relatively obvious to most that the tobacco sector is ex-growth and over the longer term that inevitably presents some challenges,” Tant said in a phone interview. “We looked at caffeine, we looked at high-energy drinks, it wasn’t limited to cannabis, but cannabis seemed like the one we had the most obvious overlap and connectivity with.”Oxford DealImperial dipped its toe into the sector last year with an investment in closely held Oxford Cannabinoid Technologies Ltd. and decided to investigate the Canadian market after it legalized recreational pot in October.“I think we probably talked to the majority of the larger listed entities” before settling on Auxly, Tant said.Auxly will be Imperial’s exclusive global cannabis partner and will gain access to its vaping technology and Liverpool-based R&D lab Nerudia, which is already licensed to work with cannabis.“The vape IP is a huge portion of the non-financial value in this transaction and ensures that Auxly is going to have best-in-class vape devices,” said Hugo Alves, who will replace Chuck Rifici as Auxly’s chief executive officer this week.Imperial’s technology won’t show up in Auxly’s vape devices when they’re first released on Dec. 16, the day vapes, edibles and beverages will join dried flower and oils on legal Canadian store shelves.Vape Market“We’ve been at it now for close to a year, so I’m happy to report that our vapes are designed, our oils are formulated, our pens are tuned to our specific oil and the hardware is ready,” Alves said. “Our collaboration with Nerudia is forward looking.”Tant believes the Canadian market for derivative products like vapes will be worth about C$6 billion by 2025. Although Imperial is taking a go-slow approach for now, he sees future opportunities to expand its investments in cannabis.“We’re taking a pretty cautious approach to investing in the space, we haven’t spent the $1.4 billion that Altria spent in Cronos,” he said.Tant said he wishes Canada’s pot regulations were less fragmented across provinces, while Pellerin at Pax said he wishes advertising rules made it easier to communicate with the consumer.“We continue to be in an environment which I’ll say is the worst it’ll ever be from a category standpoint,” Pellerin said. “It’s still very difficult to talk to the consumer through all the constraints and controls in place right now.”Upcoming Events This WeekMONDAY 8/26Pre-market earnings: James E. Wager Cultivation Corp.TUESDAY 8/27Pre-market earnings: iAnthus Capital Holdings Inc., Canopy Rivers Inc., Abacus Health Products Inc.Post-market earnings: Curaleaf Holdings Inc., Slang Worldwide Inc.WEDNESDAY 8/28Pre-market earnings: Origin HousePost-market earnings: Green Thumb Industries Inc., Tilt Holdings Inc., Vivo Cannabis Inc.THURSDAY 8/29Pre-market earnings: WeedMD Inc., Vireo Health International Inc., MJardin Group Inc.Post-market earnings: Harborside Inc., Planet 13 Holdings Inc., Sunniva Inc.The Centre for Management Technology hosts the CannaBiz Invest Asia Summit in Bangkok through Aug. 30Last Week’s Top StoriesMarijuana Dealer or Dispensary? How Black Market Roils Tax PlansTilray to Post Canada Profit in ‘Next Quarter or Two,’ CEO SaysCannTrust Says Ontario Cannabis Store to Return PotCannTrust’s 84% Plunge From Peak Wipes Out Gains Since 2017 IPOBrazil’s Bolsonaro Supports Medical Use of Marijuana: SpokesmanCannabis Going on the Ballot in California’s Wine-Growing ValleyTo contact the reporter on this story: Kristine Owram in Toronto at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, David ScanlanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Patience in the near term should be rewarded with a ramp up in high-margin sales, beginning in December.
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the...
(Bloomberg Opinion) -- Reality is beginning to bite in the FTSE 100 as some high-yielding stocks give up on generous dividends. But many British companies are still continuing to offer jaw-dropping payouts when what investors really crave is growth.The dividend culture of the FTSE 100 has long been an oddity. Its investors have received a far higher proportion of their total returns from income over the last two decades than if they had invested in, say, the S&P 500 over the same period.With dividends a very British symbol of corporate confidence, boards are reluctant to cut them even when it might be wise to do so. So the FTSE 100 culture has been self-reinforcing.This year has brought some signs of change. Centrica Plc slashed its payout last week. Analysts had expected the utility to announce a deep cut, but not by nearly 60%. Vodafone Group Plc snipped its dividend in May. And last month, tobacco giant Imperial Brands Plc dropped a commitment to grow its payout 10% annually.Yet even now, these companies’ share prices look superficially cheap on a dividend basis, with yields (the dividend divided by the share price) of between 6% and 10%.Indeed, such ratios are nowadays pretty common in the U.K. The average dividend for the top 15 highest-yielding stocks is worth 9% of the share price. The standard explanation – that this signals dividend cuts in the coming years – doesn’t fit very well. Take analysts’ predictions for dividends in three years; even with some cuts forecast, the average yield for this group is still 9%.This is especially odd in a low-rate environment. Yields on some government bonds and high-rated corporate debt are negative or zero. Surely income investors would buy these dividend stocks if the return provided by their annual cash payouts was only 5% rather than double that level? Wouldn’t that provide sufficient compensation for the added risk?One explanation is simply that international investors just don’t care for yield anymore. Domestic U.K. income funds probably would be willing to pay more for these stocks and bid down their yields. But this group isn’t driving the market. Global investors are. They covet growth and don’t want exposure to the U.K. until there’s clarity about Brexit. The average expected increase in sales over the next two years for the top-15 yielding U.K. blue-chip stocks is under two percent. Of course, if the companies aren’t growing, it’s likely because of past under-investment caused by overly-generous dividends. But cutting dividends now to invest in growth won’t pay off for some time and would only infuriate the small pool of domestic investors who actually like the income. Meanwhile, global investors sit on the sidelines and company managers stand frozen like a deer in the headlights.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: Stephanie Baker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). We'll show how you can use...
Auxly Cannabis Group Inc. (TSX.V: XLY)(OTC: CBWTF) announced Thursday it will receive $123 million investment by way of a convertible debenture from tobacco giant Imperial Brands PLC (OTC: IMBBY). Imperial Brands will provide Auxly with a global Imperial Brands’ vaping technology and access to its vapor innovation business, Nerudia. It has a three-year term with a fixed interest rate of 4% annually.
OUTSIDE THE BOX In late June, San Francisco banned e-cigarette sales completely. That means no bricks-and-mortar sales. And no e-cigarette deliveries for online purchases. Many cities already restrict vaping and e-cigarette sales.
The Morningstar U.S. Consumer Defensive Index gained 5% quarter to date through June 21, in line with the 3% uptick in the broader market (Exhibit 1). Sector performance has strengthened over the last three months - source: Morningstar Analysts As a whole, the sector isn't terribly attractive valuation-wise.
Swiss pharmaceutical giant Roche Pharmaceuticals became the first security on OTC Markets to reach $4 billion in dollar trading volume in 2019, according to OTC Markets data. Dollar volume in the Swiss ...