British American Tobacco Share Discussion Threads

[philanderer] 13/6/2018 09:07

Downgraded by RBC TO 'sector perform '.... tp 3800p cut from 4000p

[philanderer] 12/6/2018 14:20

British American Tobacco keeps cool as it shrugs off currency hits and slow Japan

[philanderer] 12/6/2018 14:14

Hargreaves Lansdown comment:

[waldron] 12/6/2018 09:19

The share price seems to continue to disagree and continues its downward trend

i do hope richemont is truly no longer an indirect investor

[philanderer] 12/6/2018 09:14

No shocks.

[waldron] 12/6/2018 08:50

UP IN SMOKE

[waldron] 12/6/2018 08:34

British American Tobacco PLC (BATS.LN) said Tuesday that it continues to see trading in line with views, expecting strong market-share growth on the back of its global drive brands.

The maker of Dunhill and Lucky Strike cigarettes said growth in both adjusted revenue and adjusted profit are expected to be weighted toward the second half of the year as the impact from significant events will affect the comparison with the first half of 2017.

The company warned that if exchange rates are unchanged it expects they will have a negative effect of 8% on operating profit in the first half of 2018 and 6% for the full year.

BATs said it continues to aim to more than double revenue from next-generation products, such as vapor and heated tobacco products, to substantially more than 1 billion pounds ($1.34 billion) by the end of 2018.



Write to Oliver Griffin at [e-mail]



(END) Dow Jones Newswires

June 12, 2018 02:39 ET (06:39 GMT)

[ygor705] 12/6/2018 08:20

A pretty vague trading update this morning imo. Had not a clue which way it would send the share price and am slightly surprised to find it in positive territory. Very fickle market at the moment.

[philanderer] 11/6/2018 18:07

British American Tobacco was on the rise as Goldman Sachs reiterated its 'buy' rating on the stock, saying the selloff was unmerited.

It noted the stock is down 25% year-to-date, making it the worst-performing among its large-cap European staples coverage. GS cited concerns about the ability to pay down debt quickly, disruption from new entrants in next generation products and low growth within combustible cigarettes.

"In summary, we believe these concerns are overdone and the stock's valuation fails to reflect the company's growth profile, including its holding in ITC, investments in NGPs and exposure to emerging markets (EMs) all of which underpin our expected 8.5% average earnings per share growth (c.FX) over the next three years."

[philanderer] 11/6/2018 14:47

BAT to invest €800 million in its Romanian factory by 2022 to support the European expansion of glo

[mrs tubs] 11/6/2018 14:03

"At 3,774p, or merely two times forward earnings, the shares look unbelievably cheap. "

have to wonder what the IC journalists have been smoking.....

[philanderer] 11/6/2018 13:55

11 June 2018 | 12:10pm

StockMarketWire.com -

Citigroup today downgrades its investment rating on British American Tobacco PLC [LON:BATS] to neutral (from buy) and cut its price target to 3900p (from 6000p).

[speedsgh] 11/6/2018 09:18

Are tobacco investments going up in smoke? -

... Favourites

Imperial Brands is our pick of the two. Granted, our most recent buy tip hasn’t quite played out as we hoped. Over that time, the share price was hit by bad news, including the collapse of wholesaler Palmer and Harvey, as well as suggestions that the US Food and Drug Administration (FDA) would cut down the amount of nicotine in combustible cigarettes sold in the US. Still, the company looks well placed to deal with the shift from traditional tobacco to next-generation products. Its exposure to the US, regardless of the FDA’s decision, is less than its closest rival. It’s also done well to maintain cash flow, and maintain its place on our list of income majors. At 2,721p, or 10 times forward earnings, the shares don’t look expensive compared with their own history, either.

Outsiders

British American Tobacco isn’t a traditional ‘outsider’. In our view, the buy case for Imperial is just a touch stronger. BATS recently completed one of the biggest M&A transactions in history with the £41.8bn purchase of Reynolds America – the largest ever purchase of a tobacco company. This has made it the biggest vaping company in the world, so it too looks well placed to benefit from the shift to alternative products. But the Reynolds deal also made it more exposed to the US market, which could see a tightening in regulation. At 3,774p, or merely two times forward earnings, the shares look unbelievably cheap. But there’s likely a reason for this.

The expert's view

Sector consolidation means that tobacco is now dominated by a small handful of very large multinationals, known as the 'Big Five': Philip Morris International, British American Tobacco, Japan Tobacco, China Tobacco and Imperial Brands.

Numerous smoking bans imposed around the world have put pressure on the industry to develop markets and alternative products to help grow revenues. Fortunately for the industry, declines in tobacco consumption volumes in the UK, mainland Europe and the US have been offset by growth in regions such as the Middle East, Eastern Europe and other emerging economies.

The development of next generation products, such as e-cigarettes, which are heavily marketed, is also helping to meet demand for less harmful forms of smoking. Currently there are few restrictions on the use of e-cigarettes, but some countries have raised the possibility of banning them in future.

Both British American Tobacco and Imperial Brands were rising nicely until the middle of last year, partly due to well-regarded acquisitions in the US where both derive a significant portion of their revenues. But when the FDA announced plans to reduce nicotine addiction through tobacco products shares across the board were hit hard.

As dramatic as the plan may sound, it’s worth noting that the details of exactly how it will be implemented may not be clear for some time and it’s likely that any major changes will be phased in gradually, which gives companies time to adjust and grow their non-nicotine next generation products. Judging by recent comments from the largest tobacco group, Philip Morris International, the sector will need to work harder and faster to grow its next generation sales in order to avoid a gap as tobacco volumes fall.

Investors need to be especially careful not to become overly obsessed with short-term movements in the shares of the big tobacco groups. They are mainly suitable for investors with a medium- to long-term outlook who are mostly interested in maximising income in their portfolios thanks to the steady nature of their revenues and the amount of cash they generate.

That, along with the huge range of markets they operate in, gives them a great ability to pay dividends and increase those consistently over time. With that in mind factors such as cash flow and dividend cover are much more important than daily changes in the share price. On top of that both BAT and Imperial Brands pay quarterly dividends with above-average yields.

IC View

Both these companies have done well to adapt to an ever-changing market for nicotine products. Traditional cigarettes may well represent the core of both businesses for some time, as it still accounts for a chunk of revenues – not to mention the fact that customers are quite literally addicted to these products. This could support the development of next-generation products, preventing investment being at the expense of cash flow or dividends. Nicotine is still a highly addictive substance no matter the delivery method, be it combustibles, vaporisers or some other further innovation. If customers are hooked, then the cash flows should keep coming well into the future.

[thanksamillion] 08/6/2018 15:27

already touched 3500 during US hours in mid April

[dewandinesh] 08/6/2018 11:12

Five years weekly chart shows a major head and shoulder pattern with 3500 as a rough target.

[philanderer] 07/6/2018 23:41

Trading update next tuesday may give a few pointers.

[chiragmahe] 07/6/2018 21:08

Hmmmm bought 2 days ago

[philanderer] 07/6/2018 16:31

New 18 month low

cable = 1.3433

[thanksamillion] 06/6/2018 11:55

Hmm, the recent div has reduced my loss by 1% to a mere 19% so not to impressed with my judgment on this one [I thought a 15% drop from the high was too much, and then...]. But it was just an intial toe in the water, and another 5 years divis will return my losses-assuming the share price doesn't drop further.

If I had spare cash I might have been tempted, but that chart has large and small "head and shoulders" all over it and truely I dont understand why it has fallen so far. It is the invisibility of the cause of the scale of this drop that is making me hold off.

:-[

[2vdm] 06/6/2018 11:32

I'm in the same boat Thanksa£m but I also think this is oversold as do most of the brokers. Don't forget there is also a healthy divi and BATS doesn't have to worry about cash.

[thanksamillion] 06/6/2018 09:20

Not sure on this one, I still have my small toe in the water but suffering a 20% loss. BATS has done worse than IMB, presumably because of IMBs higher div, but they both have horrible charts, festooned with head and shoulders all over them. Will continue to hold, but fear £30 could be coming.

Good luck to those who differ.

[this_time_its_different] 05/6/2018 14:38

It will drift till the trading update, the market has got this one wrong and I expect a big jump after the trading update. People forget a lot of the world smokes outside developed countries and their products are addictive, I see £55 target within the next year.

[philanderer] 05/6/2018 14:01

Still just drifting down / bumping along... trading update next tuesday.

[philanderer] 01/6/2018 08:22

1st june Jefferies buy tp 5200p cut from 6000p