Broker Tips: Imperial Tobacco

Source from:  ShareCast 03/11/2009

Citigroup expects Imperial Tobacco's earnings to improve by 22% this year, giving scope for a boost to an already generous dividend. The US bank expects the tobacco giant to hike its 2009 dividend by 16%, making the yield at the current price 5%, which looks out of kilter with the current interest rate environment. Though the shares have outperformed the FTSE over the last three months, they have underperformed the UK tobacco sector and the European consumer index, and on a projected price/earnings ratio of around 10, Citi rates the shares a buy. Enditem