Morgan Stanley analyst Rashad Kawan maintained a Sell rating on British American Tobacco today and set a price target of p3,000.00.
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Rashad Kawan’s rating is based on several factors influencing British American Tobacco’s current market position. Despite some positive developments, such as improved enforcement against illicit e-cigarettes and momentum in Velo Plus, the overall outlook remains cautious. The stock’s recent performance suggests it is priced for perfect execution, which leaves little room for error and skews the risk to the downside.
Moreover, challenges persist in the New Category segment, particularly with the legal e-cigarette market facing pressure from illicit products, especially from resilient Chinese producers. The muted trends in US cigarette volumes and the need for time to see the impact of innovations in heated tobacco further contribute to the cautious stance. As a result, Kawan maintains a preference for Imperial Brands over British American Tobacco, given the current market dynamics.