British American Tobacco, the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Bastien Agaud from Bank of America Securities reiterated a Buy rating on the stock and has a p4,600.00 price target.
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Bastien Agaud has given his Buy rating due to a combination of factors that indicate a positive outlook for British American Tobacco. The company is on track to meet its financial targets for FY25, with expectations of revenue growth and adjusted EBIT growth supported by strong margin expansion in tobacco. This is despite the elevated investment in Velo+ in the US, and the easing of costs of goods sold inflation is seen as a contributing factor.
Bastien Agaud also anticipates that British American Tobacco will achieve its financial leverage target earlier than expected, driven by stronger topline momentum in the US and reduced foreign exchange headwinds. The forecast includes a dividend increase and a significant share buyback, which are attractive to investors. Additionally, the stock’s valuation is considered appealing, trading at a discount compared to EU staples, with potential upside in US Modern Oral and vapour segments, as well as strong cash returns and accelerated deleveraging.
According to TipRanks, Agaud is ranked #4467 out of 10072 analysts.