Imperial Brands PLC (LSE:IMB) trading update was "crashingly, boringly good" and management "seems to be getting the balance right", according to analysts.
In the tobacco giant's first trading report since November, investors were told that first-half operating profits are on track to grow by low single-digits, in line with previous guidance, while the second half is expected to be underpinned by hikes to tobacco pricing.
A £1.1 billion share buyback programme is more than half completed, the FTSE 100 company said, with 3.7% of the shares in issue at the start of the year bought back.
Panmure Gordon analyst Rae Maile said: "There were times, not that long ago, when Imperial trading updates would engender a frisson of excitement as to what mistake the management team had made now and needed to cover up with some form of accounting chicanery.
"Since the management team led by Steven Bomhard came together the company has very consistently set reasonable guidance and least maintained it, and it has done so again today.
"Let the purists argue over percentage growth rates in vaping if they wish; the important points are that pricing in tobacco remains strong, profits will grow and shares will be bought back at pace."
He added: "Tobacco updates should be boring, that is what makes the sector great."
Analyst Derren Nathan at Hargreaves Lansdown said Imperial was eking out growth by imposing price increases on smokers and that the statement should provide "some reassurance to investors who may be considering Imperial’s value credentials".
He said: "So far management seems to be getting the balance right against the backdrop of a declining market, but there are still volume pressures in certain markets. Imperial aims to hold or grow market share in its five core markets, but that’s proving harder in some than in others."
Combustible tobacco (brands like Golden Virginia and JPS) sales fell in the UK and Germany, offset by increases in the US, Spain and Australia.
On next generation products, Nathan said, "these products are still a relatively small part of the picture. It's too early to say if they can be a viable replacement for the shrinking tobacco business".
He added that there "appears to be no imminent threat to the high single-digit dividend yield".
Cash generation is on track for a third year of growth and likely to pave the way for further share buybacks once the remainder of the current program is completed, said Mark Crouch, analyst at eToro.
"Generous shareholder returns have long been the focus of the tobacco giant, in the form of share buybacks and a hefty dividend. And a price earnings ratio of six suggests there is still value to be had for investors."