British American Tobacco Share Discussion Threads

[redbaron10] 27/11/2019 13:22

The pointers were there back in August with H1 results.BAT has thankfully followed through with their strategy.Hopefully Trump and the FDA can leave legislation aside during the presidential electoral cycle ie the next year

[this_time_its_different] 27/11/2019 11:40

benchod means sister f-u-c-k-e-r in hindi

[simba_] 27/11/2019 11:11

Always interesting how different media outlets spin a story. Most headlines are positive on the update. Citing 'strong year' or 'on track for full year' or 'adj revenue at top end' etc etc..FT headline: 'BATS warns Ecig growth to be at lower end of target'. Putting the word 'warns' in the headline is extremely negative. Usually for profit warnings..They do go on to say: 'thanks to increased prices and gains in market share in the declining combustible cigarette market, overall adjusted revenue growth would be at the higher end of expectations at 5 per cent'....Which is far more important, I feel. .I wonder if it were the other way round: Ecig growth up but overall revenue down, would they still have chosen the Ecig part for the headline. Its doubtful..Anyway, just an observation. Hopefully a good day here, gents :)

[andrewbaker] 27/11/2019 10:06

What's not to like now? :)

[redbaron10] 27/11/2019 09:35

Happy days.

[smokybenchod] 27/11/2019 09:24

are you an actual white rabbit?

[philanderer] 27/11/2019 08:36

Yes , already priced in.

[the white rabbit] 27/11/2019 07:57

are you still fiddling your sister benchod?

[the white rabbit] 27/11/2019 07:56

sell on news

[smokybenchod] 27/11/2019 07:36

If it doesn’t go over 30, which I’m sure it will, you’ve got the juicy dividend to look forward to. When paid it still leaves BATS with 1.5b FCF

[gabsterx] 27/11/2019 07:30

PP, well now that she got the boot the fresh blood can't do much worse so hoping to see some upside from here. Long both BATS and IMB but way more down on the latter!

[simba_] 27/11/2019 07:17

Enough to see us over the difficult 30quid level?.

[gabsterx] 27/11/2019 07:11

Overall solid update IMO, hope it will blow a bit of wind into IMB's sails as well!

[skinny] 27/11/2019 07:05

.

Trading update - ahead of closed period commencing 1st January 2020

The business continues to perform well and we expect:

· A strong financial performance on an adjusted basis

· A good performance from Combustibles, with strong price mix and share gains

· Strong results in the US

· Growing share and good revenue growth in New Categories in second half (H2)

· FY New Category constant currency revenue growth at the lower end of our range of 30-50%, reflecting the recent slowdown in the US vapour market

· De-leveraging in line with our guidance

Jack Bowles, Chief Executive:

"We expect to deliver a strong performance in 2019, building on the good progress we made in the first half. Our focus on our global strategic brands is delivering share gains and strong price mix in combustibles, both globally and in the US. Increased investment and new product launches are delivering good New Category revenue growth in H2, despite the recent slowdown in the US vapour market. We believe that the issues around vaping in the US should lead to a better and stronger regulatory environment in which we are well placed to succeed. In summary, we are delivering on our priorities. We are driving value growth in combustibles, we are investing to deliver a step change in New Categories and we are transforming the business to create a stronger, simpler, more agile BAT. We are on track for a strong year."

more.....

[mr_rooster] 26/11/2019 21:40

New York city bans flavoured eCig, BATS down 2.5% in the US. Hope tomorrow’s update reverse this.

[eeza] 26/11/2019 19:24

TU tomorrow.

[philanderer] 26/11/2019 10:42

Jefferies: British American Tobacco primed for rerating


Jefferies is expecting a positive update from British American Tobacco (BATS), which it says has the potential to rerate.

Analyst Owen Bennett retained his ‘buy’ recommendation and target price of £48 on the shares, which were trading at £30.10 yesterday.

‘British American Tobacco will release a trading update on Wednesday ahead of full-year results expected in February,’ he said.

‘We expect an upbeat message with the company reaffirming previous full-year targets despite the recent slowdown in US vapour. If this is the case, we think this could trigger a period of sustained rerating, with data points into full-year 2020 also set up to be supportive.’

[muscletrade] 23/11/2019 10:24

Altria And British American Tobacco: Perhaps The Nightmare Is Finally Ending

Nov. 22, 2019 2:27 PM ET|54 comments | About: British American Tobacco p.l.c. (BTI), MO
Daniel Thurecht
Daniel Thurecht
Long-term horizon, contrarian, oil & gas, industrials

(1,737 followers)
Summary
The large selloff of Altria and British American Tobacco's share price begun almost two and half years ago following the FDA's proposal to lower nicotine levels in cigarettes.

This was further amplified when around twelve months ago they also announced plans to completely ban menthol cigarettes.

Recently when they released their list of priority new regulations for the next twelve months, both of these were now absent.

At a minimum this provides at least a temporary reprieve, which is itself is still bullish, yet due to the lack of progress there is the possibility these regulations keep getting kicked down the road.

Introduction

It has been almost two and half years since the current nightmare engulfing the United States tobacco industry began, when on the 28th July 2017 the FDA announced their intention to reduce nicotine levels in cigarettes. Naturally this sent the share prices across the tobacco industry tumbling, with Altria (MO) and British American Tobacco (BTI) being impacted the worst given their highest exposure. The next major event occurred over twelve months later when on the 9th November 2018 the FDA subsequently announced their intention to completely ban menthol cigarettes.

When these new risks were combined with other concerns it resulted in their share prices falling approximately 48% for Altria and 57% for British American Tobacco from peak to trough. Even though there still are other concerns remaining, it appears as though perhaps the end of this nightmarish period of time may finally be ending with recent news breaking that the FDA has seemingly delayed both of these plans.

The Impact For Altria & British American Tobacco

Ultimately the impact for both companies will depend on how long this delay lasts, as neither of the proposed regulations now appears on the FDA’s updated list of planned new regulations within the next twelve months. Nevertheless it should at least help ease the general malaise the market feels across the broader tobacco industry, which was evident with Altria’s share price increasing by a healthy 3.24% whilst British American Tobacco’s increased by 2.82% by the end of the first trading session following this news.

Since these risks have been around for a while now, investors will be unlikely to forget them in the short-term and nor should they as the lingering risk remains that in future years the FDA will once again renew their assault on this fronts. Although I am hesitant to stick my neck out regarding unpredictable future government regulations, I believe that there is quite a good possibility these new regulations keep being kicked down the road. This belief primarily stems from almost two and half years having passed since the first nicotine announcement with little tangible progress made before now being taken off the twelve month priority list.

Although I was bullish regarding the ability of both companies to mitigate these risks, especially in the case of the proposed menthol ban, it is nonetheless even more bullish if these events never actually transpire. Even if these risks eventually resurface, then the extra time they now have should allow them to be better prepared to help ensure they are able to maintain their cherished dividend payments.

Risks Still Unresolved

Even if these risks were completely resolved, there are still other concerns weighing down their shares at the moment. The most notable being the weakness in United States cigarette volumes, as consumers continue moving away towards either e-cigarettes or cease smoking completely. Altria’s 6.62% year on year cigarette volume decline in the third quarter of 2019 certainly has not helped, especially since this was assisted by favorable inventory movements and thus otherwise would have fallen by 7.00%. This large decline has not occurred in isolation with years of declines of a similar magnitude occurring recently, as seen in the graph below:

Altria Cigarette Volumes Year On Year Change

Image Source: Author.

The other main risk stems from new regulations targeted towards e-cigarettes, which has been facing an onslaught against them at both the state and federal level following several linked deaths and high levels of underage use. Naturally this is a significantly larger risk for Altria than British American Tobacco following the former’s large investment in Juul (JUUL). Given the current situation it is too early to make a prediction that carries any conviction regarding the ultimate outcome of this risk.

Conclusion

It seems as though perhaps attacking nicotine, menthol and e-cigarettes simultaneously has proven too taxing for the FDA and given the concerns over underage e-cigarette usage it is not surprising that the other two have been taken off the plate. Although this is undoubtedly a bullish development for the tobacco industry, shareholders would be wise not to completely forget about these risks and thus they should avoid getting too carried away as this could prove only a temporary reprieve.

[andrewbaker] 22/11/2019 10:25

When BATS gets above £31, then above £32, it should keep going towards £40 again, with maybe a couple of sticking points on the way. Whatever, the divi whilst these things are playing out, make for a lot of comfort. :)

[muscletrade] 22/11/2019 07:04

Note the mention of menthol in the comment by liberum below.

British American Tobacco PLC (LON:BATS) and Imperial Brands PLC (LON:IMB) shares both lit up on Thursday as it appeared the industry would be given some headroom on tighter nicotine rules by the US regulator.

The US Food and Drug Administration's fall unified agenda, which sets the regulatory priorities for the year ahead, was published overnight without the plan for a new tighter nicotine standard rule, that had been mooted.

This was "good news" for the sector, said broker Liberum.

"It also appears menthol is stalling as well. As a result, we are pushing back our implementation period by one year, for conservatism.

"It appears the FDA has bigger fish to fry with the youth e-cigarette crisis."

[crossing_the_rubicon] 21/11/2019 11:06

"White House confirms meeting on vaping"
Reports earlier this week suggested President Trump would delay a decision on vaping restrictions, though the White House just confirmed his meeting with the industry for tomorrow.

British American Tobacco reveals the US investment management giant, The Capital Group of Companies, had increased its stake in the company to above 11%.

[andrewbaker] 21/11/2019 10:14

For those looking to hold a stock with good revenues likely and a continuing good dividend and at a low P/E, look no further than BATS. For those who are critical of this that or the other, keep selling so the rest of us can buy. And for those who are worried about growth stocks, small caps et al, BATS can hold the cash you receive from selling out other holdings; and you're not likely to take a loss over time, plus the income is nice too. :)

[simba_] 21/11/2019 08:48

We've not been able to hold above £30 for any amount of time here previously. Not gonna get excited just yet but it's always good to see it try.