British American Tobacco (BTI)
NYSE:BTI
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British American Tobacco
(NYSE:BTI)
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Rating:69Neutral
Price Target:
$70.00
â–²(22.79% Upside)
Action:Reiterated
Date:02/18/26
BTI scores solidly due to improving profitability and constructive earnings-call outlook on savings, deleveraging and shareholder returns, supported by attractive valuation (moderate P/E and high yield). The score is held back mainly by financial volatility (notably the 2023 loss) and a sharp 2025 decline in operating/free cash flow, while technicals indicate a longer-term uptrend but neutral near-term momentum.
Positive Factors
New Category (Modern Oral) leadership
Rapid Modern Oral growth and Velo's outsized traction indicate a durable structural shift toward smokeless products. Category leadership creates recurring consumable revenue, increases customer lifetime value, and diversifies earnings away from declining combustible volumes, supporting long‑term revenue resilience and margin stability.
Negative Factors
Meaningful leverage
Persistently high absolute debt levels and a declining equity base constrain strategic flexibility. Elevated leverage raises sensitivity to cash‑flow shocks, limits ability to pursue M&A or aggressive reinvestment, and leaves the company exposed to interest or macro volatility until deleveraging targets are achieved.
Read all positive and negative factors
Positive Factors
Negative Factors
New Category (Modern Oral) leadership
Rapid Modern Oral growth and Velo's outsized traction indicate a durable structural shift toward smokeless products. Category leadership creates recurring consumable revenue, increases customer lifetime value, and diversifies earnings away from declining combustible volumes, supporting long‑term revenue resilience and margin stability.
Read all positive factors
British American Tobacco Key Performance Indicators (KPIs)
Any
Adjusted Profit from Operations by Geography
Shows profit performance across different regions, highlighting areas of strong operational efficiency and potential challenges due to local market conditions or regulatory environments.
Shows profit performance across different regions, highlighting areas of strong operational efficiency and potential challenges due to local market conditions or regulatory environments.
Data provided by:
The Fly
The FlyBritish American Tobacco (BTI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$136.93B
Dividend Yield5.22%
Average Volume (3M)3.79M
Price to Earnings (P/E)12.9
Beta (1Y)>-0.01
Revenue Growth2.16%
EPS Growth171.90%
CountryUS
Employees48,989
SectorConsumer Defensive
Sector Strength42
IndustryTobacco
Share Statistics
EPS (TTM)3.51
Shares Outstanding2,168,098,000
10 Day Avg. Volume3,636,952
30 Day Avg. Volume3,793,093
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)1.92
Price to Sales (P/S)3.59
P/FCF Ratio15.87
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue5.22
Enterprise Value/Gross Profit6.25
Enterprise Value/Ebitda10.60
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)4.88
Revenue Forecast (FY)$35.46B
British American Tobacco Business Overview & Revenue Model
Company Description
British American Tobacco p.l.c. provides tobacco and nicotine products to consumers in the Americas, Europe, the Asia-Pacific, the Middle East, Africa, and the United States. It offers vapour, heated, and modern oral nicotine products; combustible...
How the Company Makes Money
BAT primarily makes money by selling nicotine and tobacco products to distributors, wholesalers, and retailers, generating revenue from the volume sold and the net price per unit after trade terms (such as discounts, promotional allowances, and ot...
British American Tobacco Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call conveyed clear positive transformation momentum: top-end-of-guidance delivery, strong Modern Oral outperformance (Modern Oral +48%, Velo Plus >300%), U.S. recovery (U.S. revenue +5.5%, adjusted profit +5.9%), meaningful productivity savings and strengthened shareholder returns (dividend +2%, buyback to GBP 1.3bn). However, material challenges remain—Vapour declines and illicit market pressure, significant APMEA weakness (revenue -7.2%, profit -17.9%), transactional FX headwinds and near-term Fit2Win costs—leading management to guide conservatively for 2026. On balance the positive operational progress, cash generation and category leadership outweigh the regional and category headwinds.Positive Updates
Smokeless Consumer Growth
Added 4.7 million smokeless consumers in 2025, bringing the total to 34.1 million, driven mainly by Modern Oral — the strongest growth acceleration to date and positioning the business for 2026.
Negative Updates
Vapour Category Weakness and Illicit Market Pressure
Vapour revenue declined nearly 9% overall (H1 mid-teens decline), driven mainly by illicit pressures in the U.S. and Canada; Vapour down >11% in AME and Vuse was down ~3.4% for the full year despite H2 recovery signs.
Read all updates
Q4-2025 Updates
Positive
Negative
Smokeless Consumer Growth
Added 4.7 million smokeless consumers in 2025, bringing the total to 34.1 million, driven mainly by Modern Oral — the strongest growth acceleration to date and positioning the business for 2026.
Read all positive updates
Company Guidance
Management guided to a return to its midterm algorithm — 3–5% revenue growth, 4–6% adjusted profit from operations growth and 5–8% adjusted diluted EPS growth — and said 2026 should sit at the lower end of those ranges with profit performance second‑half weighted (driven by New Category investment phasing and Fit2Win savings ramping). They expect low double‑digit New Category revenue growth (led by Velo), a further improvement in New Category contribution, and continued savings: a target of GBP 2.0bn productivity savings by 2030 (having already delivered GBP 1.2bn since 2023) plus Fit2Win to deliver GBP 600m annualized incremental savings by 2028 (around GBP 500m by 2027), with ~GBP 600m of associated costs over the next two years (c. GBP 500m treated as adjusting, including ~GBP 100m non‑cash). Financial priorities include >GBP 50bn free cash flow to 2030, a progressive dividend (a 2% increase announced) and a sustainable buyback of GBP 1.3bn for 2026, while continuing to deleverage from 2.55x adjusted net debt/EBITDA (end‑2025) toward a 2.0–2.5x target.British American Tobacco Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
62
Positive
Cash Flow
58
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 25.61B | 25.87B | 27.28B | 27.66B | 25.68B |
| Gross Profit | 21.38B | 21.43B | 22.39B | 22.85B | 21.09B |
| EBITDA | 11.76B | 7.74B | 13.28B | 12.23B | 11.19B |
| Net Income | 7.76B | 3.07B | -14.37B | 6.67B | 6.80B |
Balance Sheet | |||||
| Total Assets | 109.29B | 118.90B | 118.72B | 153.55B | 137.37B |
| Cash, Cash Equivalents and Short-Term Investments | 3.84B | 5.81B | 2.96B | 4.03B | 3.27B |
| Total Debt | 35.07B | 36.95B | 39.73B | 43.14B | 39.66B |
| Total Liabilities | 61.15B | 68.90B | 65.78B | 77.84B | 69.96B |
| Stockholders Equity | 47.93B | 49.64B | 52.57B | 75.37B | 67.10B |
Cash Flow | |||||
| Free Cash Flow | 5.79B | 9.52B | 10.25B | 9.87B | 9.19B |
| Operating Cash Flow | 6.34B | 10.13B | 10.71B | 10.39B | 9.72B |
| Investing Cash Flow | 1.39B | 1.38B | -296.00M | -705.00M | -1.14B |
| Financing Cash Flow | -8.76B | -10.63B | -9.31B | -8.88B | -8.75B |
British American Tobacco Technical Analysis
Positive
57.01
Price Trends
59.73
Positive
59.19
Positive
56.22
Positive
Market Momentum
1.34
Positive
48.33
Neutral
5.86
Positive
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 57.01 is below the 20-day moving average (MA) of 62.80, below the 50-day MA of 59.73, and above the 200-day MA of 56.22, indicating a neutral trend. The MACD of 1.34 indicates Positive momentum. The RSI at 48.33 is Neutral, neither overbought nor oversold. The STOCH value of 5.86 is Positive, 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 1 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
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $278.31B | 24.98 | -105.29% | 3.59% | 8.48% | 45.92% | |
72 Outperform | $2.47B | 17.56 | 6.14% | 0.35% | 66.52% | 56.14% | |
71 Outperform | $120.18B | 14.46 | -255.35% | 7.02% | 0.75% | -19.96% | |
69 Neutral | $136.93B | 12.91 | 16.33% | 5.22% | 2.16% | 171.90% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $1.71B | 29.44 | 17.29% | 0.28% | 16.10% | 26.07% | |
53 Neutral | $1.28B | 39.78 | 2.24% | 6.15% | -0.77% | -65.72% |
* Consumer Defensive Sector Average
BTI
British American Tobacco
61.79
19.20
45.06%
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69.58
12.95
22.88%
PM
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177.38
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1.70%
UVV
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51.87
-9.68
-15.73%
TPB
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84.93
10.86
14.66%
RLX
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2.06
0.09
4.73%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.