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British American Tobacco
(LSE:BATS)
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Rating:71Outperform
Price Target:
4,531.00 p
▲(9.63% Upside)
Action:Reiterated
Date:07/31/26
The score is driven by solid profitability and supportive earnings-call direction (EPS guidance, New Categories progress, capital returns) and reinforced by a positive technical trend (price above key moving averages). The main constraints are balance-sheet leverage and the recent decline in free cash flow, alongside regional/category headwinds and notable one-off costs discussed on the call.
Positive Factors
New Categories Growth
Rapid growth in New Categories, especially Modern Oral, demonstrates successful diversification beyond combustibles and expanding consumer adoption. Rising contribution and gross profit indicate improving scale economics, supporting a more durable growth and profitability profile over the next several quarters.
Negative Factors
Meaningful Leverage
Elevated debt and moderate leverage reduce financial flexibility relative to a less-indebted balance sheet. Although management targets leverage of 2.0–2.5x, finance costs and debt obligations can constrain investment capacity and make earnings more sensitive to operating setbacks.
Read all positive and negative factors
Positive Factors
Negative Factors
New Categories Growth
Rapid growth in New Categories, especially Modern Oral, demonstrates successful diversification beyond combustibles and expanding consumer adoption. Rising contribution and gross profit indicate improving scale economics, supporting a more durable growth and profitability profile over the next several quarters.
Read all positive factors
British American Tobacco (BATS) vs. iShares MSCI United Kingdom ETF (EWC)
Market Cap
£89.17B
Dividend Yield5.91%
Average Volume (3M)3.44M
Price to Earnings (P/E)14.1
Beta (1Y)0.54
Revenue Growth0.70%
EPS Growth110.32%
CountryUK
Employees47,797
SectorConsumer Defensive
Sector Strength42
IndustryTobacco
Share Statistics
EPS (TTM)2.92
Shares Outstanding2,157,884,300
10 Day Avg. Volume3,772,099
30 Day Avg. Volume3,436,666
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)1.92
Price to Sales (P/S)3.60
P/FCF Ratio21.13
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
£5,205.00Price Target Upside25.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)3.61
Revenue Forecast (FY)£26.16B
British American Tobacco Business Overview & Revenue Model
Company Description
British American Tobacco p.l.c. provides tobacco and nicotine products to consumers in the United States, Europe, Latin America, Canada, the Asia-Pacific, the Middle East, Central Asia, Caucasus, and Africa. The company offers vapour products; hea...
How the Company Makes Money
BATS makes money primarily by selling nicotine products to the trade (e.g., wholesalers, distributors, and retailers) across multiple geographies. The largest revenue stream historically comes from combustible cigarettes: BATS earns revenue based ...
British American Tobacco Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 11, 2027
Earnings Call Sentiment Positive
The call presented clear positive momentum across New Categories (notably Modern Oral) and a strong U.S. multi-category performance, with solid margin expansion, EPS growth (adjusted EPS +7.9%), and progress on cost transformation and cash returns. Significant regional weaknesses (notably APMEA), declines in Heated Products and Vapour in some markets, regulatory and illicit challenges, and sizeable one-off charges temper the outlook. On balance, achievements (accelerating New Category profitability, upgraded EPS guidance, margin and cash strength, Fit2Win savings visibility) outweigh the regional and category headwinds, supporting a constructive outlook while acknowledging near-term moderation and investment-driven costs.Positive Updates
Group Financial Performance
Group revenue increased 2.9% (constant currency); adjusted gross profit rose 3.8%; adjusted profit from operations grew 3.5%; adjusted diluted EPS up 7.9%. Group operating margin expanded 30 basis points to 43.7% (10 bps at current rates).
Negative Updates
APMEA Underperformance
APMEA revenue declined 6.3%, driven primarily by combustibles; Heated Product revenue down 13% and Vapour revenue down 28% in the region; adjusted profit in APMEA declined 16.5% due to combustible headwinds, illicit trade and inventory timing.
Read all updates
Q2-2026 Updates
Positive
Negative
Group Financial Performance
Group revenue increased 2.9% (constant currency); adjusted gross profit rose 3.8%; adjusted profit from operations grew 3.5%; adjusted diluted EPS up 7.9%. Group operating margin expanded 30 basis points to 43.7% (10 bps at current rates).
Read all positive updates
Company Guidance
Guidance summary: management expects adjusted profit from operations to accelerate in H2 (profit second‑half weighted) driven by improvements in AME and APMEA and the phasing benefit of Fit2Win, with New Category revenue growth targeted at mid‑teens in H2 led by Velo and Vuse; full‑year revenue and operating profit are expected at the lower end of the company’s algorithm/range, absorbing around a 1% transactional FX headwind, and full‑year EPS growth is now guided toward the middle of the 5–8% range. Financial assumptions include net finance cost of ~GBP 1.65bn and an underlying tax rate of 24–25%; Fit2Win savings are expected to reach GBP 700m annualized by 2028 (GBP 500m by 2027) with total one‑off costs of ~GBP 950m (GBP 840m adjusting) mainly in 2026–27. Capital allocation and cash priorities remain intact: targeting 2–2.5x leverage by year‑end, a GBP 1.3bn share buyback in 2026 alongside a progressive dividend, and a commitment to deliver more than GBP 50bn of free cash flow by 2030.British American Tobacco Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
63
Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 25.78B | 25.61B | 25.87B | 27.28B | 27.66B | 25.68B |
| Gross Profit | 15.51B | 21.38B | 21.43B | 22.39B | 22.85B | 21.09B |
| EBITDA | 12.41B | 14.06B | 7.74B | 8.83B | 12.29B | 11.67B |
| Net Income | 6.44B | 7.76B | 3.07B | -14.37B | 6.67B | 6.80B |
Balance Sheet | ||||||
| Total Assets | 108.39B | 109.29B | 118.90B | 118.72B | 153.55B | 137.37B |
| Cash, Cash Equivalents and Short-Term Investments | 2.53B | 3.84B | 5.81B | 5.26B | 4.03B | 3.27B |
| Total Debt | 35.06B | 35.75B | 36.95B | 39.73B | 43.14B | 39.66B |
| Total Liabilities | 59.79B | 61.15B | 68.90B | 65.78B | 77.84B | 69.96B |
| Stockholders Equity | 48.38B | 47.93B | 49.64B | 52.57B | 75.37B | 67.10B |
Cash Flow | ||||||
| Free Cash Flow | 5.40B | 4.36B | 9.52B | 10.25B | 9.87B | 9.19B |
| Operating Cash Flow | 5.98B | 4.91B | 10.13B | 10.71B | 10.39B | 9.72B |
| Investing Cash Flow | -146.00M | 1.17B | 1.38B | -296.00M | -705.00M | -1.14B |
| Financing Cash Flow | -7.63B | -7.11B | -10.63B | -9.31B | -8.88B | -8.75B |
British American Tobacco Technical Analysis
Negative
4133.00
Price Trends
4257.26
Negative
4410.02
Negative
4319.70
Negative
Market Momentum
-14.15
Negative
44.65
Neutral
32.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BATS, the sentiment is Negative. The current price of 4133 is below the 20-day moving average (MA) of 4158.55, below the 50-day MA of 4257.26, and below the 200-day MA of 4319.70, indicating a bearish trend. The MACD of -14.15 indicates Negative momentum. The RSI at 44.65 is Neutral, neither overbought nor oversold. The STOCH value of 32.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:BATS.
British American Tobacco Risk Analysis
British American Tobacco disclosed 1 risk factors in its most recent earnings report. British American Tobacco reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
British American Tobacco Peers Comparison
UnderperformOutperform
Sector (62)
GB:BATS
British American Tobacco
4,129.00
440.75
11.95%
GB:IMB
Imperial Brands
2,445.00
-477.86
-16.35%
British American Tobacco Corporate Events
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
British American Tobacco Tightens Free Float With Further Share Buybacks
Positive
Sep 14, 2026
British American Tobacco has continued executing its share buyback programme, repurchasing 506,000 ordinary shares of 25 pence each from Goldman Sachs International between 7 and 11 September 2026 at volume-weighted average prices ranging from 4,0...
Regulatory Filings and Compliance
BAT Discloses Insider Share Purchases by Senior Executive and Associate
Positive
Sep 9, 2026
British American Tobacco disclosed share purchases by Chief Corporate Officer Kingsley Wheaton and a closely associated person, in line with regulatory requirements for reporting transactions by senior management. The company’s ordinary shar...
Business Operations and StrategyStock Buyback
British American Tobacco Cancels 302,000 Shares in Latest Buyback Tranche
Positive
Sep 7, 2026
British American Tobacco has repurchased 302,000 ordinary shares on the London Stock Exchange between 2 and 4 September 2026 as part of its ongoing share buyback programme authorised by shareholders at the April 2026 AGM. The company will cancel t...
Business Operations and StrategyRegulatory Filings and Compliance
BAT executives increase holdings through share incentive plan
Positive
Sep 3, 2026
British American Tobacco has disclosed that several senior executives, including Chief Executive Tadeu Marroco and Chief Operating Officer Johan Vandermeulen, have purchased small numbers of ordinary shares under the company’s HMRC-approved ...
Business Operations and StrategyExecutive/Board Changes
BAT Grants Three-Year Restricted Share Award to Digital Director
Positive
Sep 2, 2026
British American Tobacco has granted an equity award to Javed Iqbal, Director, Digital and Information, under its Restricted Share Plan. The award consists of ordinary shares priced at 4,173 pence per share and is structured to vest over three yea...
Executive/Board ChangesRegulatory Filings and Compliance
BAT awards multi-year share package to new CFO Dragos Constantinescu
Neutral
Sep 2, 2026
British American Tobacco has granted a series of conditional share awards to its new chief financial officer, Dragos Constantinescu, to compensate for long-term incentives forfeited on leaving his previous employer. The awards, all in ordinary sha...
Business Operations and StrategyPrivate Placements and Financing
British American Tobacco Issues New Shares Under Employee Scheme
Neutral
Sep 1, 2026
British American Tobacco has issued and allotted 12,810 new ordinary shares between 1 August and 31 August 2026 under its Sharesave employee share scheme, with the new stock admitted to trading on the London Stock Exchange under an existing block ...
Regulatory Filings and Compliance
British American Tobacco updates market on voting rights and share capital
Neutral
Sep 1, 2026
British American Tobacco reported that as of 28 August 2026 its issued share capital comprised 2,159,984,896 ordinary shares with voting rights, while a further 132,648,864 shares were held in treasury. The company noted that this voting rights fi...
Business Operations and StrategyStock Buyback
BAT cancels 555,000 shares as buyback trims share count
Positive
Sep 1, 2026
British American Tobacco has continued executing its previously announced share buyback programme, repurchasing 555,000 ordinary shares between 24 and 28 August 2026 from Goldman Sachs International at volume‑weighted average prices slightly...
Regulatory Filings and Compliance
BAT discloses routine director share purchase via dividend reinvestment
Neutral
Aug 28, 2026
British American Tobacco has disclosed a small share purchase by non-executive director Serpil Timuray and her closely associated person, Abdurrahman Murat Timuray, following the reinvestment of dividend income. The pair jointly acquired 49 ordina...
Other
BAT CEO and Associate Reinvest Dividend into Company Shares
Positive
Aug 26, 2026
British American Tobacco disclosed that Chief Executive Tadeu Marroco and his closely associated person, Luciana Franco Do Amaral, jointly acquired ordinary shares in the company through the reinvestment of dividend income on 25 August 2026.The tr...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
BAT Cancels 780,000 Shares in Ongoing Buyback Programme
Positive
Aug 24, 2026
British American Tobacco has continued executing its previously announced share buyback programme, repurchasing 780,162 ordinary shares from Goldman Sachs International between 17 and 21 August 2026. The company intends to cancel these shares, red...
Regulatory Filings and Compliance
BAT CEO Marroco Transfers Shares to Joint Account With Closely Associated Party
Neutral
Aug 20, 2026
British American Tobacco disclosed that Chief Executive Tadeu Marroco transferred 40,645 ordinary shares from his own account to a joint account held with Luciana Franco Do Amaral. The transaction, recorded on 19 August 2026 and conducted outside ...
DividendsRegulatory Filings and Compliance
BAT Executives Boost Holdings via Dividend Reinvestment Plan
Neutral
Aug 18, 2026
British American Tobacco has disclosed a series of routine share acquisitions by senior executives following the reinvestment of dividend income through a Computershare Share Plan Account. On 14 August 2026, President and CEO of Reynolds American ...
DividendsRegulatory Filings and Compliance
BAT Executives Reinvest Dividends Into Shares via Incentive Plan
Neutral
Aug 18, 2026
British American Tobacco disclosed that several senior executives, including Chief Executive Tadeu Marroco and other members of top management, acquired small numbers of ordinary shares through the reinvestment of dividend income under the company...
Executive/Board Changes
BAT CEO Receives Shares Under Deferred Bonus Scheme
Neutral
Aug 18, 2026
British American Tobacco disclosed that its chief executive, Tadeu Marroco, acquired 377 ordinary shares in the company, valued at £15,886.78, under the firm’s Deferred Share Bonus Scheme. The transaction, dated 17 August 2026 and execu...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
BAT Cancels 610,000 Shares in Latest Buyback Round
Positive
Aug 17, 2026
British American Tobacco has repurchased 610,000 ordinary shares of 25 pence each from Goldman Sachs International between 11 and 14 August 2026 under its ongoing share buyback programme. The company, which is cancelling the repurchased stock, is ...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
BAT cancels 710,000 shares in latest buyback tranche
Positive
Aug 10, 2026
British American Tobacco has repurchased 710,000 ordinary shares from Goldman Sachs International between 3 and 7 August 2026 under its ongoing share buyback programme, authorised by shareholders at the April 2026 AGM and originally announced in M...
Business Operations and StrategyPrivate Placements and Financing
British American Tobacco Prices $1.5bn Bond Offering to Support Smokeless Shift
Positive
Aug 4, 2026
British American Tobacco’s financing arm B.A.T Capital Corporation has priced a $1.5bn offering of senior unsecured notes split evenly between tranches maturing in 2033 and 2036, guaranteed by BAT and several key subsidiaries. The proceeds a...
Business Operations and StrategyPrivate Placements and Financing
British American Tobacco Issues New Shares Under Employee Scheme
Neutral
Aug 3, 2026
British American Tobacco has issued and allotted 3,371 new ordinary shares of 25 pence each between 1 July and 31 July 2026 under its Sharesave Scheme, admitting them to trading on the London Stock Exchange Main Market under an existing block admi...
Regulatory Filings and Compliance
British American Tobacco Updates Market on Voting Rights and Share Capital
Neutral
Aug 3, 2026
British American Tobacco p.l.c. reported that, as of 31 July 2026, its issued share capital comprised 2,162,701,773 ordinary shares of 25p each with voting rights, of which 132,654,339 shares were held in treasury. The disclosed voting rights figu...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
British American Tobacco Cancels Newly Repurchased Shares in Ongoing Buyback
Positive
Aug 3, 2026
British American Tobacco has repurchased a series of ordinary shares between 27 and 31 July 2026 under its ongoing buyback programme, authorised by shareholders at the April 2026 annual meeting. The shares, bought via UBS and Goldman Sachs at pric...
Regulatory Filings and Compliance
BAT Director Matthew Wright Buys £247,500 in Company Shares
Positive
Aug 3, 2026
British American Tobacco has disclosed that non-executive director Matthew Wright purchased 5,500 ordinary shares in the company at £45.00 per share on 3 August 2026. The transaction, executed on the London Stock Exchange and totaling £2...
Business Operations and StrategyStock Buyback
British American Tobacco Extends Capital-Reducing Share Buyback
Positive
Jul 30, 2026
British American Tobacco has entered into an agreement with Goldman Sachs International to continue its share buyback programme between 30 July and 12 October 2026. Goldman Sachs will execute purchases independently, with all repurchased shares to...
Business Operations and StrategyStock BuybackFinancial Disclosures
BAT’s H1 2026 Results Underscore Pivot to Smokeless Products and Confirm FY Guidance
Positive
Jul 30, 2026
British American Tobacco reported first-half 2026 results broadly in line with expectations, highlighting that smokeless products now represent 19.8% of group revenue and that New Categories revenue rose 18% at constant FX. Overall revenue grew 2....
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
BAT Tightens Free Float With Latest Share Buyback and Cancellation
Positive
Jul 27, 2026
British American Tobacco has continued to execute its share buyback programme, repurchasing a series of ordinary shares from UBS AG London Branch between 20 and 24 July 2026 at prices around 4,54–4,66 thousand pence per share. The company in...
Stock BuybackRegulatory Filings and Compliance
British American Tobacco Updates Market on Latest Share Buybacks and Reduced Share Count
Positive
Jul 20, 2026
British American Tobacco has continued its previously announced share buyback programme, purchasing and cancelling a series of ordinary shares during the period from 13 to 17 July 2026. The transactions were executed across the London Stock Exchan...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
British American Tobacco Advances Share Buyback, Cuts Free-Float Share Count
Positive
Jul 13, 2026
British American Tobacco has continued its previously announced share buyback programme, repurchasing and cancelling a series of ordinary shares between 6 and 10 July 2026 through UBS AG’s London branch. The transactions, executed at volume&...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
BAT Advances Share Buyback, Cuts Free-Float Share Count
Positive
Jul 6, 2026
British American Tobacco has continued executing its previously announced share buyback programme, repurchasing roughly 478,000 ordinary shares between 29 June and 3 July 2026 through Merrill Lynch International and UBS AG London Branch. The share...
Business Operations and StrategyRegulatory Filings and Compliance
BAT executives boost holdings via HMRC-approved share plan
Positive
Jul 3, 2026
British American Tobacco disclosed that several senior executives, including Chief Executive Tadeu Marroco and Interim Chief Financial Officer Javed Iqbal, acquired small volumes of ordinary shares on 1 July 2026 through the company’s HMRC-a...
Business Operations and StrategyPrivate Placements and Financing
British American Tobacco Issues New Shares Under Sharesave Scheme
Neutral
Jul 1, 2026
British American Tobacco has issued and allotted 12,044 new ordinary shares between 1 June and 30 June 2026 under its Sharesave Scheme, a share plan typically used to facilitate employee participation. The new shares, which were admitted to tradin...
Business Operations and StrategyRegulatory Filings and Compliance
BAT updates market on voting rights and share capital
Neutral
Jul 1, 2026
British American Tobacco reported that, as of 30 June 2026, its issued share capital comprised 2,165,321,922 ordinary shares with voting rights, establishing the official voting rights figure for investors. The company also disclosed that it held ...
Business Operations and StrategyStock Buyback
BAT cancels nearly 600,000 shares in latest buyback tranche
Positive
Jun 29, 2026
British American Tobacco has repurchased and intends to cancel 597,155 ordinary shares, bought on the London Stock Exchange between 22 and 26 June 2026 as part of its ongoing share buyback programme. The move, executed through Merrill Lynch Intern...
Regulatory Filings and Compliance
BAT discloses internal share transfer by Chief Operating Officer
Neutral
Jun 26, 2026
British American Tobacco has disclosed an internal share transfer involving Chief Operating Officer Johan Vandermeulen and a person closely associated with him. The transaction, reported under regulatory requirements for senior management dealings...
Business Operations and StrategyStock Buyback
BAT extends buyback with new closed-period mandate to UBS
Positive
Jun 26, 2026
British American Tobacco has entered an irrevocable, non-discretionary agreement with UBS AG’s London branch to repurchase its ordinary shares during the closed period from 30 June to 29 July 2026. The trades will be executed independently o...
Business Operations and StrategyStock Buyback
BAT cancels nearly 500,000 shares in latest buyback tranche
Positive
Jun 22, 2026
British American Tobacco has repurchased and cancelled a total of 494,286 ordinary shares, bought between 15 and 18 June 2026 from Merrill Lynch International under its ongoing share buyback programme. The transactions, authorised by shareholders ...
Regulatory Filings and Compliance
BAT Discloses Nil-Cost Internal Share Transfer by Chief Operating Officer
Neutral
Jun 19, 2026
British American Tobacco has disclosed an internal share transfer by Chief Operating Officer Johan Vandermeulen involving 11,299 ordinary shares. The transaction, dated 18 June 2026, was a movement of shares between his own accounts for no conside...
Business Operations and StrategyStock BuybackRegulatory Filings and Compliance
BAT Cancels 617,000 Shares in Latest Buyback Tranche
Positive
Jun 15, 2026
British American Tobacco has repurchased and cancelled 617,131 ordinary shares between 8 and 12 June 2026 under its ongoing share buyback programme, with trades executed by Merrill Lynch International on the London Stock Exchange. Following these ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.