Broker snap: Imperial rights issue concerns overdone, Citi says
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Citigroup has raised its recommendation on Imperial Tobacco to 'buy' from 'hold' and lifted its price target to 2,980p from 2,530p, saying that concerns over its rights issue are ill-founded.
It noted that the company has seen its share price fall by 7% this year, underperforming rival British American Tobacco by 9%, despite the defensive qualities it offers investors.
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As well as enjoying inelastic demand and low input costs, the company also benefits from the pound's weakness against the euro, the broker noted.
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