Picture supply: Getty Pictures
It’s been a unstable few weeks for the inventory market, due to the warfare in Iran. But the FTSE 100 hasn’t collapsed. There was a correction, a drop of 10%, however no full-blown crash. It’s even clawed a lot of that again.
The blue-chip index closed at 10,667 on Friday (17 April). That’s simply 2.2% beneath its all-time excessive of 10,910, reached on 27 February, the day earlier than the battle started. That’s a exceptional present of resilience. Can it go ont o break 11,000 from right here?
This has been an odd disaster. We’ve had dire warnings of the largest oil shock in historical past. But traders have been completely completely satisfied to take Donald Trump at his phrase that all the things’s underneath management.
The FTSE 100 may fly
On Friday, they obtained what they needed. Trump confirmed the Strait of Hormuz is open. The FTSE 100 jumped, whereas the S&P 500 hit a contemporary document of seven,126 after rising 1.2%. We’ve seen this rather a lot these days. Geopolitical shocks set off a sell-off, then discount hunters pile in. The Covid hunch in 2020, the Ukraine invasion in 2022 and US tariff threats in 2025 all match that sample.
This confirms our agency view at The Motley Idiot, that promoting in a panic hardly ever pays. As an alternative, traders ought to grit their enamel, and take the chance to snap up cut-price shares. It isn’t simple although, when the headlines scream disaster. A lot could have waited for even decrease costs and missed the bounce.
So what occurs on Monday? The rally may proceed. Or it’d nicely reverse, following reviews that Iranian gunboats are focusing on transport within the Strait of Hormuz. Both means, traders ought to discover loads of discount shares on the market. To my shock, cigarette maker Imperial Manufacturers (LSE: IMB) is immediately one in all them.
Imperial Manufacturers shares look good worth
Tobacco shares have been among the many greatest FTSE 100 performers of the millennium. That’s extraordinary, given the regular decline in smoking charges throughout the West. Imperial Manufacturers, like FTSE 100 rival British American Tobacco, has used its branding energy to seize an even bigger share of a shrinking market, whereas shifting into options resembling vapes. And it’s saved traders candy with a gradual stream of rising dividends.
Its shares fell laborious after Tuesday’s underwhelming buying and selling replace. Imperial Manufacturers reported an honest begin to its 2026 monetary yr and caught to steerage of three%–5% development in underlying working revenue. But traders fixated on slippage in its Subsequent Technology Merchandise portfolio, and weaker market share in key areas.
That factors to harder circumstances forward however the response nonetheless feels harsh. Imperial Manufacturers is the FTSE 100’s greatest faller over the past month, down greater than 13.5%. Over 12 months, it’s slipped 6.5%. That leaves it wanting good worth although.
Imperial Manufacturers now trades on a modest price-to-earnings ratio of 8.86, whereas the yield has crept as much as a juicy 5.77%. Tobacco shares aren’t for everybody, they usually’re underneath fixed regulatory menace. However at this value, and with that earnings, it nonetheless appears to be like value contemplating.
There’s a lot extra worth left within the FTSE 100 and that’s unlikely to alter. No matter occurs within the subsequent few unstable days.
