British American Tobacco Share Discussion Threads

[crossing_the_rubicon] 16/3/2020 12:20

Precisely what has happened imo as well Cass.
Forced sellers of profitable positions to fund margin calls etc etc.

Who knows really.

The speed of the sell off is being exacerbated by algos/computerised trading..

[cassini] 16/3/2020 12:14

I think everything is getting sold off in this crash. Sometimes good stocks are liquidated to pay for other bad positions. Bit of a disconnect today between IMB and BATS - IMB actually bunted up 7% although it's given up most of that now. Hard to fathom some of the price moves.

[2vdm] 16/3/2020 11:01

Can this really fall much further? BATS is cash generative, profitable and well managed and pays a decent dividend. Perhaps a haven stock during these troubled times? Views appreciated.

[minerve 2] 06/3/2020 12:55

(Courtesy of FT Markets now, Thursday 5th March 2020)


And Bernstein turns positive on British American Tobacco:

We are upgrading British American Tobacco to Outperform. In the eleven months since CEO Jack Bowles took over the business, the speed of change has been impressive, and we believe that BAT is now future-proofing its business by investing through the P&L in NGPs.

In less than twelve months since taking over, Bowles has overseen the launch of a significant restructuring program. Project Quantum will see a net reduction in managerial staff of 20% to reduce bureaucracy and accelerate the business. This kind of cultural shift takes time, but all the early signs point to the transition being well underway.

FY19 results last week also indicated that 2H19 saw a – frankly – VAST uptick in NGP investment through the P&L. BAT invested an incremental £700m+ in NGPs in 2019, of which ~£600m came in 2H19. There is still more work to be done, but it now seems clear that BAT is taking NGPs more seriously, which should help to future-proof the business as the transition from cigarettes to NGPs continues to gain steam globally.

Over the next four years, we estimate that BAT will generate ~£31bn of equity FCF, of which ~£21bn will go towards dividends, £9bn will go to deleverage, and £1bn will go to buybacks (restarting in FY23). On a four-year view, we expect that this shift within EV from debt to equity should engender significant re-rating, which – when combined with earnings growth – means that we think the stock could double in four years. The 7% yield is the cherry on top.

[crossing_the_rubicon] 05/3/2020 15:28

And todays challenge is:

Bernstein - Raises to Outperform (Market perform) TP 3900p

versus

DZ bank TP cut to 2600p(2650p) SELL

Rather be a continued buyer myself....

[muscletrade] 05/3/2020 09:45

BERNSTEIN RAISES BRITISH AMERICAN TOBACCO TO 'OUTPERFORM' (MARKET-PERFORM) - PRICE TARGET 3900 (3800) PENCE

[p0pper] 04/3/2020 13:08

Interesting read.

[rjmb] 04/3/2020 13:03

There is a new 'VYPE' shop in my town.

[muscletrade] 03/3/2020 15:31

@step. you are right to be wary of brokers views and I share your views that no reason to buy at the moment from their views. but no reason to sell either.

[muscletrade] 03/3/2020 15:28

Shock and awe from the fed at 3pm. emergency 50 basis point cut. will it work????

[stepone68] 03/3/2020 12:55

Understood. But surely that's all known, and there's almost no way that position can improve. So what happens when the brokers start to change their mind and go negative?

I'm not saying that will happen but I am saying that broker optimism is not a reason to buy a stock. You'd be better off looking for companies where the brokers are overwhelmingly negative, using the 'things can only get better' principle.

Just a thought.

StepOne
(BATS Holder)

[muscletrade] 03/3/2020 11:54

Some cheery news..

Credit Suisse reiterated their outperform this morning and increased share price target from 4035 to 4200.

Worth noting in these turbulent times that as of today of 18 large brokers covering BAT there are 13 strong buys, 4 buys and 1 neutral. there are zero sells and zero strong sells.

brokers aren't everything of course but very positive really.

[crossing_the_rubicon] 02/3/2020 08:50

BAT is less competitive than Juul in U.S. e-vapor, its success in non-U.S. vapor is relatively limited, and it is significantly behind Philip Morris in Heated Tobacco. In addition, BAT’s high exposure to menthol in the U.S. (menthol is c. 60% of its U.S. revenues and 20-25% of group EBIT) adds another tail risk.

With BAT more expensive than Altria, and having already assigned Buy ratings on Altria and ;Philip Morris, we maintain a Neutral rating on BAT.



Altria sure is cheap.
But so is BAT imo.

Happy to own both.

[muscletrade] 28/2/2020 10:28

If it is any comfort on such a turbulent day both Deutsche and UBS have both reiterated their Buy recommendations today £40 and £39 target price respectively.(give or take a few pence)

[crossing_the_rubicon] 28/2/2020 09:06

Where does this



disguised link go to???

[rndm355] 27/2/2020 13:26

Also covered today at

[muscletrade] 27/2/2020 12:41

from motley fool contributor. (not always a fan but hard to argue against).

.
Recent market declines have thrown up some fantastic bargains in the FTSE 100. This could be an opportunity that’s too good to pass up for long-term investors. With that in mind, here’s one 7%-yielding FTSE 100 dividend stock that’s recently fallen out of favour with the market. However, it looks appealing as an income investment from a long-term perspective.

Income and growth

British American Tobacco (LSE: BATS) is one of the FTSE 100’s top income stocks. Ethical considerations aside, this company has one of the best dividend growth track records of all FTSE 100 companies. It has also achieved one of the most reliable earnings growth records of any large-cap stock over the past six years.

Net profit has increased at a compound annual rate of 9% for the past six years. Meanwhile, British American has hiked its dividend at an annual rate of nearly 7% per annum.

Recent trading updates from the business suggest that this trend will continue. For the year ended 31 December 2019, the company reported a 6.2% increase in adjusted revenue at current exchange rates. Adjusted profit increased by 7.6% and adjusted earnings per share jumped 9.1%.

Meanwhile, the group’s strong cash flows allowed it to reduce net debt by 4%. Rising revenues, coupled with fatter profit margins, helped the company delivered this performance.

These are all extremely positive developments. Analysts have expressed concern about British American’s high level of borrowings in the past, but this release seems to suggest that management has as the company’s debt pile under control. What’s more, the business was able to pay off around £2bn of debt, even after returning £4.5bn to shareholders via dividends.

Following this performance, management has decided to increase the firm’s full-year dividend by 3.6%.

Growth initiatives

The company’s 2019 results also show British American’s growth initiatives are yielding results. Revenue from so-called “new categories“, which includes tobacco heating and vapour products, such as e-cigarettes as well as “modern oral” tobacco products, increased nearly 37% year-on-year to £1.2bn at current exchange rates.

Management is confident this trend can continue. It’s forecasting £5bn of revenues from these new growth initiatives by the end of the decade.

Cash is king

British American’s impressive cash flow metrics suggest the dividend is exceptionally safe for the time being. At the time of writing, the stock supports a dividend yield of 6.5% for 2019. It’s also set to increase to nearly 7% over the next 12 months.

Further, after recent declines, shares in the company are dealing at a price-to-earnings ratio of just 9.6, which suggests the stock offers a wide margin of safety at current levels. Indeed, considering British American’s strong cash generation, the track record of growth and future potential, this seems to undervalue the business substantially.

As such, now could be a great time to snap up shares in this undervalued income champion. Its long-run potential is highly attractive, and the market-beating dividend yield means investors will be paid to wait for market sentiment to improve.

The post Why I’m planning to buy more of this 7%-yielding FTSE 100 dividend stock appeared first on The Motley Fool UK.

[muscletrade] 27/2/2020 12:22

Re the cashflow.My interpretation is that cashflow after dividends should almost double to about 3.7B this year.good chunk of cash to progress debt reduction.

[philanderer] 27/2/2020 12:19

Hargreaves Lansdown's Steve Clayton ......

"These are predictably solid results, which demonstrate the strength of BAT's businesses around the world. Tobacco faces many challenges currently, but BAT is navigating around them and generating substantial cash flows in the process... A restructuring programme launched last year helped margins to rise, whilst strong underlying cash flow saw debt levels falling,"

Alliance News

[redbaron10] 27/2/2020 10:31

Winner winner chicken dinner.A defensive stock like this is a good a place as any to try and conserve capital if you're invested in stocks with this possible pandemic around.Doesn't mean this won't tumble but you just have to ride it out best you can.Wish i had some more capital at my disposal for later on if this crisis intensifies.

[18bells] 27/2/2020 09:12

With so much worry/panic around the world i doubt now is a good time to stop smoking!

[simba_] 27/2/2020 08:15

Surprised it opened up. Will it hold?

[muscletrade] 27/2/2020 08:03

Early doors of course but excellent opening considering wider market down 2% GLA

[muscletrade] 27/2/2020 07:51

Not sure if anyone will be listening this morning though as FTSE 100 futures down almost 2% but at least we can hold with confidence. DYOR of course.