Positive Outlook for British American Tobacco: Buy Rating Backed by Growth Projections and Strategic Innovations

Analyst Bastien Agaud of Bank of America Securities maintained a Buy rating on British American Tobacco (BATS – Research Report), retaining the price target of p3,900.00.

Bastien Agaud’s rating is based on a combination of factors that suggest a positive outlook for British American Tobacco (BAT). One of the key reasons for the Buy rating is the expected confirmation of the company’s FY26 outlook, which includes projected organic sales growth of 2.5% and adjusted EBIT growth of 3.9%. This outlook is supported by the potential for margin expansion due to the recent weakness of the USD, which could reduce transactional foreign exchange headwinds.
Bastien Agaud also highlights the transformation of BAT’s business through the commercial rollout of new products in the New Categories segment, such as Vuse Ultra and Glo Hyper & Hilo. These innovations are expected to drive sustainable long-term sales and EBIT growth. Furthermore, the stock’s valuation is considered attractive, trading at a significant discount to European staples, and it offers a compelling dividend yield. These factors, combined with the potential upside from stricter enforcement against illicit vaping products in the US, underpin the Buy recommendation.

According to TipRanks, Agaud is an analyst with an average return of -1.9% and a 35.71% success rate.

In another report released on May 20, UBS also maintained a Buy rating on the stock with a £40.00 price target.