Shares digital

Imperial Tobacco (IMT) £26.00

Much has been said about the impact of the UK smoking ban on Imperial Tobacco’s profits, however, the company is exposed to markets where smoking legislation is light, and expanding market share will also provide support. The company has given shareholders in Altadis (the Spanish cigarette maker it is trying to snap up) until 18 January to accept the bid, which the board has recommended. A 2% blip in Imperial Tobacco’s share price last Monday (14 January) comes only a week after the shares hit all-time highs. Tim Hughes, head of sales trading at IG Index, says that the fresh all-time highs extended a steady uptrend that has been in place for almost eight years now. He adds that the blip was not seen as a reason for investors to head for the exits, and that the shares found plenty of support ahead of the £26.00 level. We believe Imperial Tobacco is still a defensive stock so we go long, placing a stop loss at £24.45.

ACTION: BUY Imperial Tobacco • Target £28.60 • Stop Loss £24.45

TIME TARGET: 6 WEEKS