IMBB.Y heads into its May 12 half-year results with one of the cleaner short-positioning stories in the tobacco sector — bears have been pulling back sharply, and the borrow market has become almost entirely stress-free.
The most striking development this week is the collapse in short interest. Estimated short positions dropped 82% over seven days, falling to just 25,905 shares — equivalent to roughly 0.003% of the free float. That number is close to negligible. The move is even more dramatic in context: earlier in April, short interest briefly spiked above 150,000 shares, with the ORTEX short score hitting 36.8 on April 16. By April 28, that score had dropped to 25.8, the lowest reading in the recent history window. This is a deliberate unwind, not noise.
The borrow market tells the same story. Availability is extremely loose — essentially the entire lending pool is unused, with availability far above any level that would signal short-side pressure. Cost to borrow has also eased, falling roughly 16% on the week to 1.59%, after peaking above 2.3% in mid-April. That mid-April spike coincided with the short interest surge; its subsequent fall confirms the two moved together as a bloc of shorts were established and then rapidly covered. The April 20–23 window was particularly sharp, when short scores and borrowing costs both hit their recent highs before collapsing. Shorts clearly found no traction at that level.
The factor picture gives a plausible explanation for why bears retreated. The dividend score ranks in the 88th percentile — Imperial remains a reliable income vehicle in a sector where yield is the primary investment thesis. Forward EPS growth scores even higher, in the 86th percentile on 12-month YoY increase. Those two factors make it difficult to hold a short against a stock offering predictable cash returns and rising forward earnings estimates. The EV/EBITDA multiple sits at around 7.7x, a relatively undemanding valuation for a company generating over £5.9 billion in EBITDA. The EV/EBIT runs close to 8.2x. Neither multiple provides obvious fundamental justification for a short thesis.
Institutional ownership reinforces the defensive posture. Capital Research holds 10.85% of shares; BlackRock, Fidelity, and Vanguard each hold between 5% and 7%. Most added positions in Q1 2026 — BlackRock added over 1.1 million shares, Capital Research added 2 million. The one notable exception is Kenneth Dart, whose reported holding fell by nearly 15 million shares to just over 31 million. That is a large reduction for a single holder, though the change date is April 21 and the full context is not available. HSBC Global Asset Management moved the other way, adding 2.4 million shares as of early April. The net picture is one of institutional stability, with one significant seller partially offset by broad-based accumulation elsewhere.
On earnings, the prior two full-year reactions were modest. The February 2026 print moved the stock just +0.65% on the day, with a five-day follow-through of -5.2%. The November 2025 event produced a +2.1% one-day move and a similar five-day gain. Neither reaction was dramatic. The company is actively buying back shares under its £1.45 billion buyback programme, with a new tranche cancellation confirmed on April 27.
With the short score near its lowest recent level and borrowing conditions close to frictionless, the May 12 release now arrives without the backdrop of meaningful short-side pressure — a shift worth tracking as results approach.
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