- Price
- $55.63 → $54.40(−2.2%)
- Discount
- 11.7% → 13.7%(+2.0 pts)
- Next earnings is estimate
- No → Yes
- Thesis
- British American Tobacco earns investor trust for its pricing power in a shrinking cigarette market. The remaining doubt is about New Categories, the company's term for vapor products, nicotine pouches, and heated tobacco. Vuse, glo, and Velo must reach full profit while regulators tighten rules on vapor products and nicotine pouches in the United States and Europe. For the gap to close, Velo's profit margin must stay near cigarette levels as new pouch rules take effect in France and across the EU. New Category revenue growth must also hold in the mid-teens range that management guided for 2026. BAT has a new CFO, who started in September 2026. A smooth handover matters for investor trust in capital allocation. BAT holds a two-dayheld its capital markets day on September 29 and 30, 2026. Management is expected to reaffirm its medium-termIt set Horizon 2030 targets for New Category revenue growth and profit targets through 2028 therecontribution margin, and said 2026 growth will be towards the lower end of its ranges. Full-year 2026 results, expected around February 2027, will show whether New Category profit growth offset a cigarette volume decline that BAT itself raised to 2.5% for 2026. If New Categories keep progressing and BAT completes more debt paydown, the gap can close within a few quarters. The main risk is that tougher nicotine-pouch rules in Europe, or a stumble in the CFO transition, could keep New Categories from reaching full profit on schedule.
- Recent events
- 2026-09-29: At its capital markets day in Winston-Salem, BAT set Horizon 2030 targets. New Category revenue should grow at a mid-teens rate through 2030. New Category contribution margin should reach at least 30% by 2030.
2026-09-29: BAT said it expects 2026 revenue and profit growth towards the lower end of its 3% to 5% and 4% to 6% ranges. It expects EPS growth towards the middle of its 5% to 8% range. BAT shares fell on the day.
2026-09-01: Dragos Constantinescu started as BAT's new Chief Financial Officer and Executive Director. He replaced Javed Iqbal, who had served as interim CFO.
2026-07-30: BAT reported half-year 2026 revenue of £12,235 million, up 2.9% at constant currency. New Category revenue grew 18.0%, and adjusted profit from operations grew 2.5% to £5,426 million.
2026-02-11: BAT posted full-year 2025 revenue of £25,610 million. The company raised its dividend 2.0% to 245.04 pence per share, and committed to a £1.3 billion share buyback for 2026.
2025-05-28: BAT sold about 2.5% of its stake in ITC Limited for roughly $1.5 billion, cutting its holding from 25.44% to 22.94%, with proceeds directed toward debt reduction and a higher share buyback.