“A positioning makes sense,” de La Ferrière said, as the stock currently trades below 2,400 British pence and could, in the medium term, go up 20 percent and reach a price target of 2,900 pence.

In the long term, the company could even be an acquisition target, de La Ferrière said, mentioning Imperial Tobacco’s competitors Japan Tobacco and BAT as potential suitors. However, such a move could cause antitrust concerns in Europe, he said.

—By Guillaume Desjardins, Assistant Editor, CNBC.com

Additional News: Death for California’s Cigarette Tax Hike?

Additional Views: Smoking Out the Hot Tobacco Stocks

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______________________________ Disclosure:

Olivier de La Ferriere does not personally have any position on Imperial Tobacco, British American Tobacco, nor Philip Morris. KBL Richelieu Gestion holds a position in Imperial Tobacco in one of its funds, but not in British American Tobacco or Philip Morris.

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