March 28, 2019 / 12:42 PM / 5 months ago

BUZZ-Citi upgrades UK tobacco companies on positive demand growth forecast


** British tobacco stocks Imperial Brands shares up 1.9 pct, BAT up 1.4 pct after Citi upgrades stocks to “buy”

** “We expect organic growth will pick up this year as NGPs (next generation tobacco and nicotine products) sales accelerate and we think the regulatory threat will probably move away from cigarettes” - Citi

** Multiple factors hit tobacco stocks last year, including increased regulatory threat against cigarettes and worsening cigarette trends in the U.S

** BAT shares have risen 26.2 pct so far this year, while Imperial Brands were up 10.3 pct - both outperforming a 7.6 pct rise in FTSE 100

** BAT shares have fallen 23 pct in the last 12 months, while IMB shares have dropped 9.5 pct

** “The shares could still rise a long way because we think the environment will continue to look less threatening” - Citi

** Imperial Brands’ margins on NGPs should turn positive later this year, while BAT is expected to record about 50 pct growth in NGP sales this year - Citi (RM:;

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