Analyst Rashad Kawan of Morgan Stanley maintained a Sell rating on British American Tobacco, retaining the price target of p2,650.00.
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Rashad Kawan has given his Sell rating due to a combination of factors impacting British American Tobacco’s future growth prospects. Despite the impressive growth of BAT’s Velo product in the US market, which has been significantly outpacing its competitors, this growth has been heavily reliant on increased promotional activities and expanding distribution points.
However, Kawan expresses concerns about the sustainability of this growth once the promotional activities and distribution expansion normalize. Additionally, the contribution of US Modern Oral products, including Velo, to BAT’s overall revenue is projected to remain minimal, representing less than 1% of total revenue by 2025. This limited impact on the broader growth story of the company underpins the Sell rating recommendation.
Based on the recent corporate insider activity of 97 insiders, corporate insider sentiment is neutral on the stock.