British American Tobacco: Constructive Entry Point with Steady Growth Outlook and Upside-Backed Buy Rating

In a report released yesterday, Bastien Agaud from Bank of America Securities maintained a Buy rating on British American Tobacco, with a price target of p4,500.00.

Bastien Agaud has given his Buy rating due to a combination of factors linked to British American Tobacco’s earnings outlook and valuation. He expects the company’s 2025 performance to broadly match market expectations, with modest growth in revenue, operating profit, and earnings per share, supported by continued expansion in New Categories and a likely increase in the dividend. He also notes that investor positioning in the stock is still constructive but appears less crowded than before, which can provide a more attractive entry point for new buyers at current levels.

Bastien Agaud’s positive stance is further underpinned by a clear medium‑term outlook into 2026, where management is expected to reaffirm guidance for steady sales and profit growth despite portfolio rationalisation in certain markets. He highlights identifiable upside drivers such as the development of the US vapour segment, potential resilience in US combustibles if oil prices remain favourable, and ongoing progress in Modern Oral and reduced‑risk products. While he does not foresee an immediate upgrade to guidance, he views the current trajectory and risk‑reward profile as supportive of a Buy recommendation, reinforced by a price objective that implies additional upside from the current share price.

In another report released on January 20, Jefferies also reiterated a Buy rating on the stock with a p5,200.00 price target.

Based on the recent corporate insider activity of 99 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of BATS in relation to earlier this year.