Imperial Brands Shares Down 5% After Settlement

Shares fell over 5% to 2,905p after a sharp FX swing turned a 2‑2.5% tailwind into a similar headwind.
Company disclosed a $200 million legal settlement with RJ Reynolds and a further $234 million payable over three years, adding ~60 bps profit drag.
Despite setbacks, Imperial reaffirmed high‑single‑digit EPS growth, >£2.2 bn free cash flow for FY 2026 and 3‑5% operating profit growth.
Morgan Stanley maintains overweight rating, price target 3,200p, noting stock trades at ~8.8× earnings, ~25% discount to BAT.