Imperial Brands‘ (LSE:IMB) shares have been see-sawing over the last year. But they’ve been in sharp decline since the start of 2026, and on Tuesday (14 April) they plunged a whopping 7%.

They’re still up 82% over a five-year basis. So the FTSE 100 company’s been far from a disaster for long-term investors. And that’s before factoring in its enormous dividends over the period.

Today’s investors aren’t interested in what’s gone before though. So let’s ask the question: is Imperial Brands’ share price at the start of a prolonged correction?

Guidance maintained…

Today, Imperial Brands released a fresh trading update. The market didn’t react well to what it saw.

But why? In it Imperial Brands said it remains on track to meet full-year guidance of “low-single-digit tobacco and double-digit NGP (Next Generation Products) net revenue growth”. The NGP category includes products like its blu vapes and Pulze heated tobacco.

Adjusted operating profit growth is still tipped at 3%-5%, with pricing initiatives in the first half expected to offset volume declines.

Imperial Brands is a cash machine, and is still expecting free cash flow of £2.2bn this year. And it’s sharing the wealth with investors via juicy share buybacks — it’s completed £700m of the £1.45bn of repurchases planned for this year.

All pretty solid, then.

… so what’s going on?

The boost from large buybacks and dividends to shareholder returns are nice. But the market really wants to see progress in NGP profits. Investors are running out of patience, as Imperial Brands’ plunge today shows.

Despite soaring sales, the huge investment it’s making in vapes and the like remains problematic for the bottom line. The firm said “NGP adjusted operating losses are expected to be moderately higher“, reflecting things like R&D costs, marketing expenses and distribution build-out costs.

With demand for its traditional combustible products in terminal decline, NGP profitability needs to start improving… and fast. Instead, profits from new product lines are heading in the other direction. Established products such as Gauloises cigarettes still dominate its product mix, accounting for 90% of sales.

Are Imperial Brands shares a buy?

Imperial Brands has significant pricing power across its portfolio, which it can leverage to grow earnings. And while it’s still playing catch-up in the NGP market, sales are still growing at a strong rate. Over the long term, this remains a potentially lucrative sector for the company.

So should investors consider buying Imperial Brands after its recent share price trouble? Let me tell you where I stand. With NGP profitability still possibly a long way off, and demand for traditional cigarettes cratering, it’s a share I wouldn’t touch with a bargepole.

There are also big questions over the safety of NGPs. Could we see restrictions on their sale and usage being imposed down the line, just like cigarettes? It isn’t impossible, in my view. Fierce competition in this segment also poses significant risk.

Today’s drop leaves Imperial Brands shares on a price-to-earnings (P/E) ratio of 9.9. Even at current prices I’m not tempted to buy.