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(Sharecast News) - Jefferies downgraded Imperial Brands on Monday to 'hold' from 'buy' and slashed the price target to 2,700p from 3,500p.
It said that while IMB has proven proficient at growing value in the combustibles segment, the upcoming sharp, multi-year series of excise taxes in Germany may materially slow growth down.
"History suggests legal cigarette volume declines materially accelerate in such circumstances as the illicit trade grows, driving us to lower our Europe estimates," the bank said.
"We detect a risk that F27 guidance could come below street estimates and see lower re-rating potential."
At 1035 BST, the shares were down 2% at 2,820p.
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