* Imperial says trading in line
* Altadis integration on track
* Shares up 0.7 percent
(Adds analysts comments and shares)
LONDON, Sept 22 (Reuters) - Imperial Tobacco Group, the world's No.4 cigarette group, said trading remained in line with its expectations while the integration of Altadis was on track, helping to push its shares higher on Tuesday.
The British maker of Lambert & Butler and West cigarettes acquired Franco-Spanish group Altadis in January 2008 to add brands such as Gauloises and Fortuna. Imperial said the integration was on track to deliver expected cost savings.
Imperial shares edged 0.7 percent higher to 1,765 pence by 0715 GMT within a firmer London stock market. Analyst Julian Hardwick at house broker RBS said that with earnings set to meet expectations, Altadis savings on track and strong cash generation, the shares look far too cheap compared to cigarette rival British American Tobacco Plc.
"We continue to see tobacco as the most attractive of the European consumer staples sectors, and Imperial, trading on a FY 2010 PE of 10.1 times, a two point discount to BAT on 12.2 times, remains the best way to play the space, in our view." Nico Lambrechts at Bank of America/Merrill Lynch agreed over the share price; "We believe that this is too low for a company with a resilient (and growing) earnings stream, a clear path to deleveraging and a high dividend yield of 4.8 percent."
The group was giving a trading update ahead of its Sept. 30 financial year end. Its full-year results were due on Nov. 10.
Imperial's annual earnings per share are expected to rise 16.5 percent to a mean of 159.5 pence in forecasts collated by Thomson Reuters I/B/E/S after last year's 136.9 pence. (Reporting by David Jones; Editing by Dan Lalor)