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British American Tobacco (BTI)
NYSE:BTI
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British American Tobacco
(NYSE:BTI)
61Neutral
British American Tobacco (BTI) vs. S&P 500 (SPY)
Market Cap
$89.85B
Dividend Yield7.11%
Average Volume (3M)4.83M
Price to Earnings (P/E)23.5
Beta (1Y)0.16
Revenue Growth-2.51%
EPS GrowthN/A
CountryUS
Employees48,989
SectorConsumer Defensive
Sector Strength79
IndustryTobacco
Share Statistics
EPS (TTM)1.70
Shares Outstanding2,203,852,800
10 Day Avg. Volume4,560,246
30 Day Avg. Volume4,827,140
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.53
Price to Cash Flow (P/CF)4.70
P/FCF Ratio4.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.50Price Target Upside-16.59% Downside
Rating ConsensusHold
Number of Analyst Covering1
British American Tobacco Business Overview & Revenue Model
Company DescriptionIncorporated in 1902, British American Tobacco plc is a London-based cigarette manufacturing company. The company manufactures and sells cigarettes, vapour and heated tobacco products, oral tobacco, nicotine products and e-cigarettes under brand names including Kent, Dunhill, Lucky Strike, and Pall Mall.
How the Company Makes MoneyBritish American Tobacco makes money primarily through the sale of its tobacco and nicotine-related products. The company's revenue model is largely driven by the global demand for its cigarette brands, which remain a significant source of income. In addition to traditional tobacco products, BTI has been expanding its portfolio to include next-generation products (NGPs), such as vaporizers, heated tobacco products, and oral nicotine pouches, in response to changing consumer preferences and regulatory environments. These NGPs are designed to offer potentially reduced-risk alternatives to traditional smoking, which helps BTI tap into new market segments and diversify its revenue streams. BTI's earnings are further supported by its extensive distribution and logistics network, strategic acquisitions, and partnerships with local distributors and retailers worldwide. The company's ability to adapt to regional market conditions and regulatory changes also plays a crucial role in maintaining its profitability.
British American Tobacco Financial Statement Overview
Summary
British American Tobacco shows resilience in its financial structure and operational cash management, despite facing challenges in revenue growth and profitability. The removal of debt in 2024 strengthens its financial stability, although the company needs to address its earnings volatility to improve overall financial health.Income Statement
British American Tobacco's income statement reveals mixed performance. The gross profit margin remains robust at 82.8%, indicating strong cost management. However, the company has faced challenges with volatile net income, evident from the negative net profit margin of -52.7% in 2023, primarily due to a significant EBIT loss. Recent revenue growth has been stagnating, with a 5.19% decline from 2022 to 2023, raising concerns about future growth prospects.45
Neutral
Balance Sheet
The balance sheet reflects a stable financial position with zero debt in 2024, which is a positive turnaround from previous years. The equity ratio is healthy at 41.8%, showcasing a solid capital structure. However, the return on equity has been inconsistent, with a significant drop in 2023 due to negative net income. The company's asset base remains strong, supporting long-term stability.60
Neutral
Cash Flow
Cash flow analysis indicates steady operational cash generation, with a 5.5% increase in free cash flow from 2023 to 2024. The operating cash flow to net income ratio was significantly impacted in 2023 due to negative net income, but the free cash flow has remained positive, reflecting effective cash management despite earnings volatility.55
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 33.10B | 25.87B | 27.28B | 27.66B | 25.68B | 25.78B | Gross Profit |
| 26.97B | 21.43B | 22.39B | 23.10B | 21.30B | 21.64B | EBIT |
| -14.08B | 2.74B | -15.75B | 10.52B | 10.23B | 9.96B | EBITDA |
| 16.17B | 7.74B | 13.28B | 12.29B | 11.67B | 11.70B | Net Income Common Stockholders |
| -23.01B | 3.07B | -14.37B | 6.67B | 6.80B | 6.40B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.96B | 5.81B | 2.96B | 4.03B | 3.27B | 3.38B | Total Assets |
| 118.72B | 118.90B | 118.72B | 153.55B | 137.37B | 137.69B | Total Debt |
| 39.73B | 0.00 | 39.73B | 43.14B | 39.66B | 43.97B | Net Debt |
| 37.37B | -5.30B | 37.37B | 39.69B | 36.85B | 40.83B | Total Liabilities |
| 65.78B | 68.90B | 65.78B | 77.84B | 69.96B | 74.73B | Stockholders Equity |
| 52.57B | 49.64B | 52.57B | 75.37B | 67.10B | 62.67B |
| Cash Flow | Free Cash Flow | ||||
| 13.53B | 9.52B | 10.25B | 9.87B | 9.19B | 9.28B | Operating Cash Flow |
| 14.17B | 10.13B | 10.71B | 10.39B | 9.72B | 9.79B | Investing Cash Flow |
| 2.19B | 1.38B | -296.00M | -705.00M | -1.14B | -783.00M | Financing Cash Flow |
| -12.79B | -10.63B | -9.31B | -8.88B | -8.75B | -7.90B |
British American Tobacco Technical Analysis
Positive
41.36
Price Trends
38.76
Positive
37.19
Positive
35.18
Positive
Market Momentum
0.59
Negative
65.21
Neutral
97.72
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BTI, the sentiment is Positive. The current price of 41.36 is above the 20-day moving average (MA) of 39.45, above the 50-day MA of 38.76, and above the 200-day MA of 35.18, indicating a bullish trend. The MACD of 0.59 indicates Negative momentum. The RSI at 65.21 is Neutral, neither overbought nor oversold. The STOCH value of 97.72 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BTI.
British American Tobacco Risk Analysis
British American Tobacco disclosed 10 risk factors in its most recent earnings report. British American Tobacco reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
British American Tobacco Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $29.28B | 9.31 | 45.38% | 5.32% | 5.61% | 23.39% | |
72 Outperform | $98.31B | 8.89 | -503.31% | 6.92% | -0.28% | 43.51% | |
67 Neutral | $236.49B | 33.65 | -37142.11% | 3.50% | 7.75% | -9.85% | |
63 Neutral | $20.77B | 13.59 | -10.67% | 7.41% | 1.48% | 9.07% | |
62 Neutral | $1.34B | 10.89 | 8.32% | 5.95% | 12.88% | -6.33% | |
61 Neutral | $89.85B | 23.48 | 5.87% | 7.11% | -2.51% | ― | |
61 Neutral | $1.05B | 27.71 | 27.80% | 0.47% | -0.13% | 2.92% |
* Consumer Defensive Sector Average
Performance Comparison
BTI
British American Tobacco
41.38
13.46
48.21%
MO
Altria Group
58.55
17.77
43.58%
PM
Philip Morris
150.49
61.03
68.22%
UVV
Universal
54.70
7.84
16.73%
IMBBY
Imperial Brands
36.09
15.23
73.01%
TPB
Turning Point Brands
56.94
29.50
107.51%
British American Tobacco Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -3.23% | Next Earnings Date: Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view of achievements and challenges. Notable improvements in new category growth, financial flexibility, and a path to recovery in the U.S. were highlighted. However, significant challenges in the vapor market and headwinds in Bangladesh and Australia present concerns. The overall sentiment leans towards cautious optimism, with confidence in strategic investments and future growth prospects.Highlights
Transformation Momentum and Financial Flexibility
The company sharpened execution and delivered improved performance in the second half of the year, with smokeless accounting for 17.5% of group revenue, up 1 percentage point versus last year. New category contribution improved by GBP251 million and a 7 percentage point increase in category contribution margin on an organic constant rates basis.
New Category Revenue Growth
Group revenue grew by 1.3%, and new category revenue grew by 8.9%. Adjusted operating profit rose 1.4%, and diluted EPS increased by 3.6%. Modern Oral revenue grew 53% in 2024, with strong growth across all regions.
Commitment to Shareholder Returns
Progress in financial flexibility enabled the initiation of sustainable share buyback, with leverage within the target range at 2.4 times, alongside a progressive dividend with 2% growth announced.
Strong Performance in Europe
New category growth enabled the European business to exceed group mid-term revenue guidance, with significant increases in absolute category contribution through scale and efficiencies.
U.S. Market Recovery
Investments in the U.S. market have begun to pay off, with volume share stabilizing and plans for a return to growth in 2025, despite macroeconomic pressures and illicit trade challenges.
Lowlights
Challenges in the Vapor Market
Vapor revenue fell by 2.5% due to weak enforcement against illicit single-use vapes in the U.S. and Canada, distorting competition. The U.S. volumes declined by 4%, and without stronger enforcement, illicit vapor products will continue to impact the legal market.
Impact of Market Exits and Supply Chain Issues
Organic volumes declined 5% in combustibles, mainly due to U.S. market exits and supply chain issues in Sudan. Excluding these, volume declined 3.5%.
Headwinds in Bangladesh and Australia
Significant headwinds in Bangladesh due to sharp excise increases and illicit trade, and in Australia due to new tobacco regulations and rising illicit trade, expected to impact 2025 group revenue growth by 1% and group APFO growth by close to 2%.
Pressure from Macro and Illicit Trade in the U.S.
The U.S. revenue declined by 3.4% due to ongoing macroeconomic pressures impacting affordability and illicit vapor products affecting both combustibles and vapor.
Company Guidance
In the recent call, the company provided guidance for 2025 and 2026, indicating an expected group revenue growth of around 1% for 2025, impacted by significant headwinds in Bangladesh and Australia, which will affect group revenue by 1% and group adjusted profit from operations (APFO) by close to 2%. Despite these challenges, the company remains committed to achieving a 3% to 5% revenue growth and a 4% to 6% APFO growth, adjusted for Canada at constant rates, by 2026. This optimism is underpinned by expectations of an improving U.S. financial performance, further growth in new categories, and significant cost efficiencies, targeting an additional GBP2 billion in savings by 2030. Additionally, the company plans to continue rewarding shareholders with a progressive dividend and sustainable share buybacks while maintaining a balanced capital allocation.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.