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British American Tobacco (BTI) AI Stock Analysis

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British American Tobacco

(NYSE:BTI)

Select Model

Neutral 69 (OpenAI - 5.2)

Rating:69Neutral

Price Target:

$70.00

▲(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

Read all positive factors

British American Tobacco Key Performance Indicators (KPIs)

Any

Adjusted Profit from Operations by Geography

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.

Chart InsightsBritish American Tobacco's adjusted profit from operations shows a notable shift with the US consistently leading, albeit with some fluctuations. AME and APMEA regions have recently emerged as significant contributors, while APME and AMSSA have seen their contributions cease. This geographic reallocation suggests a strategic pivot towards markets with higher growth potential, potentially driven by regulatory changes or shifting consumer preferences. The absence of recent earnings commentary leaves the underlying reasons open to interpretation, but the data indicates a clear realignment of focus within the company's operational strategy.

Data provided by:

The Fly

British American Tobacco (BTI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$130.10B

Dividend Yield5.22%

Average Volume (3M)4.24M

Price to Earnings (P/E)12.5

Beta (1Y)-0.03

Revenue Growth2.16%

EPS Growth171.90%

CountryUS

Employees47,440

SectorConsumer Defensive

Sector Strength42

IndustryTobacco

Share Statistics

EPS (TTM)3.50

Shares Outstanding2,164,844,500

10 Day Avg. Volume4,476,521

30 Day Avg. Volume4,236,915

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 Cap0.99

Enterprise Value/Revenue5.02

Enterprise Value/Gross Profit6.01

Enterprise Value/Ebitda10.19

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

EPS Forecast (FY)4.8

Revenue Forecast (FY)$35.06B

British American Tobacco Business Overview & Revenue Model

Company Description

British American Tobacco p.l.c. provides tobacco and nicotine products to consumers in the United States, Europe, Latin America, Canada, the Asia-Pacific, the Middle East, Central Asia, Caucasus, and Africa. The company offers vapour products; hea...

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

Profitability rebounded strongly in 2025 after a large 2023 loss, but earnings volatility lowers confidence. Leverage remains meaningful and equity/assets have trended down versus 2022, partially offset by some debt reduction. Operating cash flow and free cash flow stayed positive, yet both declined sharply in 2025, creating a near-term cash trajectory risk.

Income Statement

Positive

Balance Sheet

Positive

Cash Flow

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

Technical Analysis Sentiment

Neutral

Last Price57.01

Price Trends

50DMA

60.66

Negative

100DMA

59.18

Positive

200DMA

56.37

Positive

Market Momentum

MACD

0.03

Positive

RSI

47.83

Neutral

STOCH

7.98

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BTI, the sentiment is Neutral. The current price of 57.01 is below the 20-day moving average (MA) of 60.37, below the 50-day MA of 60.66, and above the 200-day MA of 56.37, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 47.83 is Neutral, neither overbought nor oversold. The STOCH value of 7.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PM	74 Outperform	$282.36B	25.53	-105.29%	3.59%	8.48%	45.92%
RLX	73 Outperform	$2.42B	16.60	6.14%	0.35%	66.52%	56.14%
MO	71 Outperform	$119.55B	15.05	-255.35%	7.02%	0.75%	-19.96%
BTI	69 Neutral	$130.10B	12.55	16.33%	5.22%	2.16%	171.90%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
TPB	62 Neutral	$1.71B	29.21	17.29%	0.28%	16.10%	26.07%
UVV	53 Neutral	$1.28B	39.75	2.24%	6.15%	-0.77%	-65.72%

* Consumer Defensive Sector Average

Performance Comparison

BTI

British American Tobacco

60.02

11.50

23.70%

Altria Group

71.79

17.35

31.88%

Philip Morris

181.62

7.19

4.12%

UVV

Universal

51.62

-0.90

-1.71%

TPB

Turning Point Brands

87.65

13.29

17.87%

RLX

RLX Technology

1.95

-0.30

-13.49%

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.Date of analysis: Feb 18, 2026