Imperial BrandsXTER:ITB +0.66%71 Operating Margin % is 10.01% as of Mar. 2026, which is 6% above its 10-year median of 9.41. GuruFocus rates XTER:ITB with a GF Score™ of 71/100 and a GF Value™ of €20.89 (Significantly Overvalued). The stock has 3 warning signs investors should review. Among 48 Tobacco Products companies, Imperial Brands ranks better than 52.08% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Imperial Brands Operating Margin % Related Terms
Imperial Brands Operating Margin % Historical Data
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The historical data trend for Imperial Brands's Operating Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
XTER:ITB vs PM, MO, TPB: Operating Margin % Comparison
For the Tobacco subindustry, Imperial Brands's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Imperial Brands Operating Margin % vs Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, Imperial Brands's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Imperial Brands's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Imperial Brands's Operating Margin % for the fiscal year that ended in Sep. 2025 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Imperial Brands (XTER:ITB) has a Operating Margin % of 10.01% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Imperial Brands and its competitors. This is near median its historical median of 9.41. Over the past decade, Imperial Brands' Operating Margin % has ranged from 7.88 to 10.96. According to the industry distribution chart, Imperial Brands ranks #23 out of 48 companies in the Tobacco Products industry, placing it in the top 47.9%.
Is Imperial Brands' Operating Margin % too high?
Imperial Brands' current Operating Margin % of 10.01% is near median its 10-year median of 9.41. Over the past 10 years, this metric has ranged from a low of 7.88 to a high of 10.96. The Tobacco Products industry median Operating Margin % is 9.37. Imperial Brands' value of 10.01% is 6.9% above this industry median. Based on the distribution chart, Imperial Brands ranks #23 out of 48 companies in the Tobacco Products industry, which is above the industry midpoint. Overall, Imperial Brands has a GF Score™ of 71/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Imperial Brands' Operating Margin % compare to PM and MO?
According to the Tobacco Products industry distribution chart, Imperial Brands ranks #23 out of 48 companies for Operating Margin %. This puts Imperial Brands in the upper half of its industry. The industry median Operating Margin % is 9.37. Imperial Brands' value of 10.01% is 6.9% above this benchmark. Historically, Imperial Brands' own Operating Margin % has ranged from 7.88 to 10.96 over the past decade. While the company's 10-year median is 9.41 vs. the industry median of 9.37, Imperial Brands has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a Tobacco Products company?
The median Operating Margin % among Tobacco Products companies is 9.37, based on 48 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Imperial Brands's current Operating Margin % of 10.01% is 6.9% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Imperial Brands and its competitors. For the Tobacco Products industry, the median Operating Margin % is 9.37 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Imperial Brands's current Operating Margin % is 10.01%, which is near median its own 10-year median of 9.41. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Imperial Brands stock overvalued right now?
Based on GuruFocus' analysis, Imperial Brands (XTER:ITB) is currently considered Significantly Overvalued. The stock's GF Value™ is €20.89, compared to a current price of €32.11 — trading 53.7% above its estimated fair value. The current Operating Margin % is 10.01%, which is near median its 10-year median of 9.41 and 6.9% above the Tobacco Products industry median of 9.37. Imperial Brands' overall GF Score™ is 71/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Imperial Brands (XTER:ITB), the current Operating Margin % is 10.01% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Imperial Brands (XTER:ITB) Overvalued in 2026?
Based on GuruFocus' analysis, Imperial Brands stock appears to be overvalued.
The current stock price of €32.11 is trading 53.7% above its estimated GF Value™ of €20.89.
GuruFocus considers Imperial Brands to be Significantly Overvalued.
Key valuation signals for XTER:ITB:
Operating Margin %: 10.01% (near median its 10-year median of 9.41)
GF Value™: €20.89 vs. price of €32.11 (53.7% above fair value)
Industry Position: 6.9% above the Tobacco Products median (#23 of 48)
No single metric tells the full story. See the XTER:ITB stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Imperial Brands is the world's fourth-largest international tobacco company (excluding China National Tobacco), with total fiscal 2025 volume of 187 billion cigarettes sold in more than 120 countries. Its largest and most important markets are the US (where it sits as the third-largest manufacturer, following its acquisition of the Winston and Blu brands), Germany, the UK, Spain, and Australia. The firm also holds a leading global position in the fine-cut tobacco and hand-rolling paper categories. It has a logistics platform in Western Europe, Altadis.
71GF Score
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