Shares in Imperial Brands PLC (LSE:IMB) have fallen around 15% since the start of last year, despite the dividend growth and share buybacks it has offered investors.
Regulatory pressure has long been the bugbear of tobacco investors and the latest government interventions have been on the group's moves into vaping, with the UK and New Zealand also floating plans for a 'next generation' ban on tobacco sales that would prevent those below a certain age from ever being able to smoke.
However, analysts see the burden of regulation starting to ease.
After the UK confirmed a levy on vapes, Citigroup analysts said, "we believe that alongside the proposed ban on disposable vapes from April 25, the regulatory risk/reward is skewing to the upside" for both Imperial and rival BAT.
The market last heard from Imperial, which owns an array of key baccy brands from Golden Virginia, John Player Special and Gauloises as well as the Blu vaping brand, in March when it launched a second wave of its share buyback.
The last time there was an update on trading it was at its full-year results in November, when it revealed cigarette volumes fell by 7.1%, excluding the withdrawal from Russia, but that prices were up by an average of 11%. Vaping and other 'next generation product' (NGP) sales rose 26%.
For the current year, chief executive Stefan Bomhard guided to revenues below the ongoing target of mid-single-digit growth rates, saying they would most likely grow in low single digits on constant currency rates, with adjusted operating profit "close to the middle" of the mid-single-digit range.
Performance will be weighted to the second half of the year, though, which he said was driven by the phasing of pricing last year and investments in NGP.
As a result, first-half operating profit is expected to grow at low single digits. at constant currency.
Analysts at AJ Bell said "As it enters the fourth year of Mr Bomhard’s five-year turnaround plan, the FTSE 100 constituent is nevertheless having to work hard to meet those [mid-single-digit] goals."
The City currently expects a full-year decline of 3.9% in volumes to 190.3 million, 2% growth in net revenues to £8.1 billion, helped by a 45% increase in NGP sales to £321 million, with group adjusted operating profit inching up to £4.0 billion from £3.9 billion last time.