|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||25.52 - 25.76|
|52 Week Range||21.37 - 36.07|
|Beta (5Y Monthly)||0.27|
|PE Ratio (TTM)||13.56|
|Forward Dividend & Yield||3.80 (14.87%)|
|Ex-Dividend Date||Nov 20, 2019|
|1y Target Est||N/A|
Tobacco stocks had a roller coaster 2019 that ended on a high note. Investors need to be wary of counting too much on the gains that are still coming, say analysts at AB Bernstein.
(Bloomberg Opinion) -- The next big thing for big tobacco has turned into a bit of a nightmare. Vaping took off as a potentially healthier alternative to smoking for adults looking to kick the habit. But then it caught on with a whole new generation, sparking a teen epidemic in the U.S and fears that they could graduate to smoking traditional cigarettes. Matters worsened with a spate of illnesses among some users of electronic cigarettes, raising questions about the safety of vaping for young and old.In the U.K., the fallout from declining sales of tobacco alternatives across the Atlantic has hit British American Tobacco Plc and Imperial Brands Plc hard. Now as new management teams at both companies try to figure out what’s the best strategy back to growth, their fortunes will be driven more by regulations in the U.S. than their business closer to home. But this doesn’t have to be bad news. Heightened scrutiny in the U.S. can dispel concerns about safety, and eventually pave the way for companies to expand their vaping technology to devices that deliver cannabis, vitamins and medicines. Vaping first came under scrutiny for its appeal to teenagers. Altria Group Inc.-backed Juul Labs Inc., has been besieged by lawsuits accusing it of using sweet fruit and candy flavors to overtly target under-aged users. The situation escalated over the summer, after a spate of illnesses and deaths related to electronic-cigarette use. ECigIntelligence, a data provider, now forecasts a 13% decline in the U.S. vaping market in 2020. Previously it had forecast an increase of more than 10%.As the world’s biggest vaping market, accounting for about 45% of global sales in 2019, it’s little wonder the U.S. slowdown is hurting. Imperial, which sells Winston cigarettes in the U.S., warned on profit in September, and parted company with its chief executive officer, Alison Cooper, a week later. BAT, maker of Dunhill and Lucky Strike cigarettes, recently said sales growth from its new generation products would be at the lower end of its forecast range of 30%-50%. A few months earlier, it had guided to the midpoint.With the scrutiny of vaping, having a broad-based portfolio of tobacco alternatives is crucial. Here BAT is well placed, having invested $4 billion over the past five years. Seven months since becoming CEO, Jack Bowles has reorganized its alternatives into three global brands: Glo for heated tobacco, Vuse for vaping and Velo for oral nicotine products. That shows commitment and urgency. It’s still not clear which category, if any, will be the winner, so having options on each is wise.Vaping probably has the most long-term potential. In the meantime, heat not burn options may come to prominence, especially as they haven’t been drawn into the controversy. They’re already popular in Japan, but with Philip Morris International Inc. now selling its IQOS device in the U.S. too, BAT may need to spend more in this area.The $49 billion purchase of the shares it did not already own in Reynolds American Inc. in 2017 stretched BAT’s balance sheet, pushing net debt to more than 6 times Ebitda. But leverage has come down to around 3.5 times, according to an estimate by Bloomberg Intelligence analyst Duncan Fox. That’s still high, but it gives Bowles more scope to invest and pay the dividend.Rival Imperial has made a big bet on vaping with its Blu brand, while it also has a strong position in oral tobacco. But it was late into heat not burn, only launching Pulze in Japan in May. Whoever succeeds Cooper as CEO will need to decide whether to expand in this category, or double down on vaping. Either way, it will mean more investment. For that, the new CEO can draw on the cash generated by the traditional cigarette business, an up to 2 billion-pound asset disposal program and a new dividend policy. The company will return any additional cash to shareholders through buy-backs. It should divert at least some of this into tobacco alternatives instead.Both companies should take care not to create a teen vaping craze at home. After complaints from the Campaign for Tobacco-Free Kids and other organizations, the U.K.’s advertising regulator this month banned BAT from using public Instagram accounts to promote smoking alternatives like e-cigarettes. However, it didn’t find that the company had designed ads specifically to target youth.At least investment decisions could be made against a calmer market backdrop in the U.S. There’s a growing consensus that the vaping-related illnesses and deaths involved vaping oils carrying the psychoactive ingredient in cannabis, tetrahydrocannabinol or THC. The U.S. Food and Drug Administration has warned against using black-market products.In 2020, new U.S. regulations will require companies to submit applications by May to keep their e-cigarettes on the market. Big tobacco has the resources to go through this complicated and expensive process. Smaller producers may not. Over about the next 12 months, this regime could reduce some of the competitive pressures on big tobacco. But in both tobacco and newer alternatives, it’s not going to be plain sailing. Numerous U.S. states have outlawed some kinds of e-cigarettes, and although a federal ban on vape flavors aside from tobacco now looks less likely after backtracking by President Donald Trump, it can’t be ruled out. Meanwhile, at some point, U.S. regulators may return their attention to efforts to reduce the amount of nicotine and ban menthol flavors in traditional cigarettes, bringing more pain to what remains tobacco companies’ biggest and most profitable segment by far. (Michael Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP, has campaigned for and given money in support of a nationwide ban in the U.S. on flavored e-cigarettes and tobacco.)Pressure there, and everywhere, could bring more industry hook ups. Philip Morris International and Altria in September ended their brief merger flirtation. Such talks could always come back onto the agenda again or the two may look abroad. Imperial has long been seen as a takeover target, with Japan Tobacco Inc. considered the most likely buyer. A new Imperial CEO may walk in the door only to find that there is a predator hard on the company’s heels.To contact the author of this story: Andrea Felsted at firstname.lastname@example.orgTo contact the editor responsible for this story: Melissa Pozsgay at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The number of bosses leaving the FTSE 100 reached a record on Thursday after BHP (BHP) announced chief executive Andrew Mackenzie will leave after six years at the helm of the Anglo-Australian miner. A total of 20 bosses from the UK’s blue-chip index of top stocks have been replaced or announced their departures so far this year, according to research by AJ Bell. The same thing is happening across the Atlantic where 172 U.S. chief executives stepped down in October, the highest on record, according to recent research.
Imperial Brands on Tuesday issued a "cautious" forecast for the year and named a new chairman as the tobacco producer grapples with challenges in e-cigarette products and vaping. The maker of Winston and Gauloises cigarettes reported full-year revenue from tobacco and next-generation products - e-cigarettes and vapour-based devices - of 7.99 billion pounds ($10.29 billion), up 3.9% on a constant-currency basis. "2019 has been a challenging year with results below our expectations due to tough trading in Next Generation Products," outgoing CEO Alison Cooper said in a statement.
Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Imperial Brands PLC and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future.
A British tobacco company, Dutch paint company, California-based dermatological company, and Maryland-based regional bank were among the securities that experienced the largest trading volume increases ...
Imperial Brands Plc Chief Executive Officer Alison Cooper will step down once a replacement is found, a move that comes as the cigarette maker grapples with a regulatory backlash against e-cigarettes and declining tobacco sales. The departure of Cooper, who has led the maker of Davidoff cigarettes for nine years, comes days after it issued a full-year profit warning blaming the U.S. regulatory crackdown on vaping. It also follows the impending departure of Chairman Mark Williamson, who in February announced that he would step down once a successor was found, citing new British guidelines on the length of board chair tenures.
Imperial Brands Plc Chief Executive Officer Alison Cooper will step down once a replacement is found, a move that comes as the cigarette maker grapples with a regulatory backlash against e-cigarettes and declining tobacco sales. The departure of Cooper, who has led the maker of Davidoff cigarettes for nine years, comes days after it issued a full-year profit warning blaming the U.S. regulatory crackdown on vaping. The smallest of the four major global tobacco players in the world, Imperial has been slow to react to the vaping craze in the United States, a market where it generates nearly 30% of its annual profit.
The House Committee on Oversight and Government Reform held a hearing on vaping and the troubling outbreak of vaping related illnesses. Illinois Democratic Congressman Raja Krishnamoorthi joins Akiko Fujita The Ticker to discuss what needs to be done on the regulatory front.