Imperial Tobacco Group (IMBBY) Moves to Buy: Rationale Behind the Upgrade

Core Viewpoint - Imperial Tobacco Group PLC (IMBBY) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for Imperial Tobacco Group for the fiscal year ending September 2025 is projected at $4.17 per share, reflecting an 11.5% increase from the previous year's reported figure [9]. - Over the past three months, the Zacks Consensus Estimate for the company has risen by 2%, indicating a trend of increasing earnings estimates [9]. Zacks Rating System - The Zacks rating system is based on changes in a company's earnings picture, which is a critical determinant of stock price movements [2][3]. - The system classifies stocks into five groups, with Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell), and has shown a strong track record, with Zacks Rank 1 stocks averaging a +25% annual return since 1988 [8]. Market Implications - The upgrade to Zacks Rank 2 places Imperial Tobacco Group in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term due to favorable earnings estimate revisions [11]. - Rising earnings estimates and the corresponding rating upgrade indicate an improvement in the company's underlying business, which is expected to drive stock price appreciation [6].