Share Name Share Symbol Market Type Share ISIN Share Description
British American Tobacco Plc LSE:BATS London Ordinary Share GB0002875804 ORD 25P
  Price Change % Change Share Price Shares Traded Last Trade
  -0.50 -0.02% 2,769.50 189,861 10:12:57
Bid Price Offer Price High Price Low Price Open Price
2,769.00 2,770.00 2,774.00 2,757.00 2,764.50
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Tobacco 25,877.00 7,912.00 249.70 11.1 63,539
Last Trade Time Trade Type Trade Size Trade Price Currency
10:12:55 AT 66 2,769.50 GBX
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British American Tobacco (BATS) Discussions and Chat

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15/1/202110:50British American Tobacco4,015
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15/10/201414:40TipTV: What would Maria Psarra do with BATS?-

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British American Tobacco Daily Update: British American Tobacco Plc is listed in the Tobacco sector of the London Stock Exchange with ticker BATS. The last closing price for British American Tobacco was 2,770p.
British American Tobacco Plc has a 4 week average price of 2,688.50p and a 12 week average price of 2,422.50p.
The 1 year high share price is 3,496.50p while the 1 year low share price is currently 2,362.50p.
There are currently 2,294,223,710 shares in issue and the average daily traded volume is 3,374,678 shares. The market capitalisation of British American Tobacco Plc is £63,515,583,411.35.
geckotheglorious: Excellent news indeed. Pity it isn't reflected in a rising share price.
cassini: The yield is about 7.7% currently. Bear in mind the share price is fairly low at the moment which makes the yield look big, all other things being equal. The dividend cover - which is useful to assess the affordability of the dividend - is a bit hard to ferret out as I think the ADVFN figures are out of date. The best data I can find elsewhere is that the dividend cover is 1.53 times. This is not an unusual number for a tobacco company from what I can see. Imperial's dividend cover is 1.85, so BATS' cover is lower but then, Imperial have cut their dividend this year. The Imperial dividend cover before that (from memory) was 1.37 times. Imperial's debt is a lot larger than BATS' in comparison with its size - the debt-to-equity ratio of Imperial is something like 2.6 according to ADVFN (again, figures probably a bit dodgy) whereas that of BATS is just under 1, so Imperial has a lot more debt relatively speaking (which is partly why Imperial cut their dividend). So on the face of it, the dividend does seem to be sustainable but maybe someone who read the company results this year can comment further.
redbaron10: I don't think there will be any nasties tomorrow imho.Looking at Philip Morris and its upgrade for the full year and an increase in dividend, i'm hoping for a similar outcome here.IMB surprised slightly to the upside when it reported recently and i believe there has been an uptick in the consumption of stick cigarettes with more home working and less restrictions to smoking with fewer visits to the workplace or hospitality settings like hotels restaurants and bars where smokers are treated like lepers these days.I could be totally wrong of course but there was a clearout of a lot of managers a while back so the focus is on cost-cutting and the bottom line.The battle of the NGPs be it IQOS,Vype or Blu will be of interest.IQOS does seem to have stolen a bit of a march on its competitors, and PM is holding great faith in it for growth prospects going forward.With the drop in sterling recently helping out the share price here i think the upside in any results could have already been priced in to a certain extent.We might see a 'sell the news' scenario with the results.....but i hope not.Anyway a 7%+ annual dividend is reason enough to stay in here.
muscletrade: Not sure if anyone else here has noted that "Simply Wall Stree" have published this morning an assesment that BAT intrinsic value is 98% above its current share price. (SP was 2690p when they did the calulations, which was based on DCF method.
polaris: Big tobacco has been in decline since 2016. None of us can argue with that as the SPs are significantly lower today than they were 4 years ago. The question is whether it is a decline that will continue? Where is the bottom? Can you trade the channel? The main reason i am here is that i spent a few hours this weekend looking at IMB, BATS and Altria for possible longs, given the recent falls. It's rare that i will short, unless the company is massively over-valued. That isn't the case here. Big tobacco seems to be at the bottom of recent downward channels and so seems open to longs rather than shorts. Over last few years i have been long tobacco at various points and the arguments/discussions around net debt, FCF and dividends have played out again and again. Anyone who has been long for the last 4 years has traded capital losses for dividend returns. BATS has done a lot better than IMB for example, where capital erosion far outweighs the dividend returns. FCF is an important aspect but the divis are also paid out of that..and principal (plus interest) on debt. In principle, BATS can pay off the debt over a 5-6 year period, assuming flat margin on falling sales volume (i.e. price rises match falling volumes). However, that would also mean zero dividend for that period and the share price would suffer for that. You cannot have your cake and eat it. It would take at least 10 years to retire the debt while also keeping the returns investors relatively happy. IMO, it's not even about retiring all debt. TBH, the current interest rates favour carrying debt if you can service it, particularly if you can get a fixed interest rate coupon. Big tobacco can probably do that on quite high levels of debt. In fact, it has been doing this for a while. However, the 'market' wants debt ratios to come down fast and the SPs are being hit accordingly. This probably means cutting dividends (as IMB did recently) to release more FCF for debt repayment. share price then gets hit as the yield falls...rinse and repeat. That cycle will be broken at some point, just a matter of when.
andrewbaker: I am not trying to understand how BATS share price can fall to the current level or any level where a solid safe yield can be so much, with little perceived risk. Whether its ethical,health,morals,or whatever other reasons may be in the mix, this share is and will be for quite some time, a good investment for your money. Blackrock appears to have sold out in the past year, but other fund managers have neither bought nor sold, from what I can see. The previous remark suggests that whilst tobacco is a unloved product, and perhaps many people have sold on ethical grounds, causing the drop in price, it is still a sound investment at the current level - even at higher levels - for buyers to buy in or buy more. Personally my holding is so high, that I won't buy more, as to do so would unbalance my portfolio, but if the price drops much more, I just may have to! (And its PEG is under 1 {0.83, I believe}!)
muscletrade: From Gen Alpha/seeking Alpha British American Tobacco: Back In Deep Value Territory Jul. 19, 2020 10:36 PM ET|12 comments | About: British American Tobacco p.l.c. (BTI), Includes: MO, PM Gen Alpha Gen Alpha Long only, value, Growth, growth at reasonable price (875 followers) Summary British American Tobacco operates a leading portfolio of both combustibles and next-generation products. Its share price has dropped off since the FDA's authorization of MRTP designation for competitor Philip Morris' IQOS heated tobacco product. In this article, I show why BAT's shares are highly undervalued. Change is the name of the game in corporate America. It seems that every other day, there is a post on LinkedIn (MSFT) about the merits of an “adapt or die” culture. With good reason, many companies that were highly relevant decades ago no longer hold the same prestige that they once held. Take Xerox (XRX) or Eastman Kodak (KODK), for example. Both were industry stalwarts in their heyday, and Xerox was so popular that its namesake became a verb. For example, who hasn’t heard the expression: “Can you Xerox this for me?” The so-called economic phenomenon of “creative destruction” is a powerful one, as it compels companies to continuously adapt or otherwise fade into the sunset. The tobacco industry has had the benefit of not having to change over many decades. However, in recent years, there has been a surge of innovation in the industry, with heated tobacco and vaping being prime examples. More recently, in what is seen as a victory for Philip Morris International (PM), the FDA, on July 7th, approved the marketing of the IQOS Tobacco Heating System as a modified risk tobacco product (MRTP). Specifically, this approval allows Philip Morris International and Altria (MO) to market IQOS with the following information, as noted on the FDA release: AVAILABLE EVIDENCE TO DATE: The IQOS system heats tobacco but does not burn it. This significantly reduces the production of harmful and potentially harmful chemicals. Scientific studies have shown that switching completely from conventional cigarettes to the IQOS system significantly reduces your body’s exposure to harmful or potentially harmful chemicals. Turning attention to British American Tobacco (BTI), who is the primary competitor to Philip Morris and Altria, BAT’s shares have dropped off since the FDA’s announcement. As seen below, BAT has underperformed its two peers by around 12% over the past month. While some of the drop could be attributed to the ex-dividend on July 9th, I believe at least a part of the drop, if not the majority, can be attributed to the market’s perception of the FDA announcement on IQOS as a negative for BAT’s U.S. business. (Source: Yahoo Finance) While IQOS’ first-mover advantage and modified risk designation pose a risk to BAT’s combustible business, I see the share price reaction since July 7th as being unwarranted, as BAT has an attractive portfolio of next-generation products of its own. A Diversified Tobacco Company British American Tobacco became the largest global tobacco company by revenue, when it acquired the remaining stake in Reynolds American that it did not already own in 2017. It owns a broad portfolio of both traditional combustibles and next-generation products, such as its heated tobacco and vaping offerings. It also owns oral products such as moist snuff, snus, and the fast-growing category of tobacco-free nicotine pouches. As seen below, this market is expected to grow at a CAGR of 13% and reach a global TAM of $16.6 billion by 2024. One of the key drivers for this growth will come from increasing numbers of people who are trying to quit traditional smoking. (Source: Business Wire/Technavio) While IQOS’ MRTP status presents a key risk and could potentially chip market share away from BAT’s combustible products, the company does have a pending application with the FDA to sell its own heated tobacco Glo devices. The application was submitted in 2018, and while no one knows when and if a decision will be made to allow the Glo device to be sold in the U.S., I would expect a decision to come between later this year and the middle of next year. This rough estimate is based on the two years that it took the IQOS application to be reviewed, with additional time given for COVID-19 related disruptions. In addition, I see the MRTP designation as a net positive for the heated tobacco sector as a whole, as it shapes consumer perceptions about the product. This is a net positive for when BAT’s Glo devices do get FDA approval, assuming they get the same MRTP designation. (Source: Company website) As the Glo application is pending with the FDA, BAT has positioned itself well with its tobacco-free nicotine pouch Velo product. Although this category is relatively new, it is seeing strong growth numbers, as evidenced by the 273% revenue growth that it saw last year. In addition, it also has its vapor offerings with Vuse and Vype products. It should be noted, however, that Vapor sales have declined in the U.S. since the outbreak of lung-related injuries and deaths that were reported in 2019. While the deaths have been linked to products containing THC and not nicotine, public perception (or perhaps misconceptions) on vaping took substantial damage. However, decreases in vapor usage translate to a slower decline in the volume of combustibles. Per BAT’s first half 2020 update, the U.S. cigarette industry volume decline is expected to be just 4% this year, which is an improvement from the previously forecasted 5% decline. Also, let’s not forget that BAT is a global company with strong revenue growth in both new categories and combustibles. As seen in the full year 2019 metrics below, the company managed to grow new category revenue by 32% on a worldwide basis, and combustible revenue by 4.6%. This translated to an impressive 8.4% YoY EPS growth for the full year. (Source: Spring 2020 Investor Presentation) More recently, BAT’s first-half 2020 results look promising, as the Vuse brand grew market share to 26.2% in the U.S. vapor category. Its international vaping brand, Vype, continues to gain traction as it gained share in France and Germany, where it has a leadership position, and is the fastest-growing vaping brand in Canada. In addition, management reiterated its commitment to reducing leverage to below 3.0x by the end of 2021. As seen below, leverage has steadily dropped from 4.0x in 2018. (Source: Company Investor Presentation) Turning to a peer comparison, as seen below, BAT’s P/E ratio is 13% lower than that of Altria’s. The gap is even more pronounced in comparison to Philip Morris International, with BAT’s P/E ratio being 43% lower than that of PMI. Evidently, PMI is seen as the quality play in the tobacco space, with its leadership position in IQOS and a stronger balance sheet. However, I see the 43% discount on BAT’s shares as being rather excessive, especially given its robust portfolio of next-generation products and its commitment to deleveraging its balance sheet. (Source: Created by author) Investor Takeaway British American Tobacco operates a leading portfolio of tobacco and tobacco-free products, and has demonstrated its ability to adapt to changing consumer tastes and behaviors. In addition, I’m encouraged to see management’s commitment and progress towards deleveraging its balance sheet, which has been an overhang and risk factor for the company since acquiring the remaining stake in Reynolds American in 2017. I see BAT’s share price drop since the FDA’s July 7th announcement of IQOS’ MRTP designation to be unwarranted. This announcement is a net positive for BAT’s heated tobacco product that is currently under FDA review, assuming that it gets the same designation after approval. I have a Buy rating on shares at the current price of $35.44 and a P/E ratio of 8.5. I also view the 7.5% dividend yield to be safe and attractive, as management has guided for a ~65% dividend to adjusted earnings payout ratio. This allows management to use the remaining funds for continued deleveraging and reinvestment into the business. I have a $50 price target on shares, which would bring the P/E ratio to a reasonable 12.0 and represents significant upside from today’s levels.
muscletrade: British American Tobacco shares approach major level by Richard Hunter from interactive investor | 27th November 2019 10:11 After a quick rally, a thrust above this key price level is hugely significant for BAT shares. British American Tobacco (LSE:BATS) is on course for a significantly better year, after an exceptionally difficult 2018 which saw 49% wiped off its share price. In particular, despite various challenges, the US market is performing strongly. Given that the region is responsible for over 40% of group revenue, success on the other side of the pond is critical to the company’s fortunes. There has been a slowdown in the US vaping market, however, with Presidential comments suggesting that the outright banning of e-cigarettes is rather more than just a possibility. Source: TradingView Past performance is not a guide to future performance This is not to say that BAT will necessarily be directly affected, since its products are generally not those in the firing line of the US authorities, but nonetheless the moves of the regulators is an ongoing warning shot to the tobacco industry in general. Even so, BAT considers these "New Category" products to be essential to its long-term growth, as traditional smoking declines. It has underlined that there has been substantial additional investment in the division, where revenue growth is expected to be at the lower end of a range of 30% to 50%. While New category revenues currently only account for less than 5% of overall revenues, it is clearly an area of strategic focus. More broadly, the group is guiding for overall revenue growth for the year of between 3% and 5%, with adjusted operating profit expected to fall somewhere between an additional 5% and 7%. The company’s ability to generate prodigious amounts of cash is reflected by the fact that, even after dividends, full-year free cash flow is expected to be £1.5 billion. Indeed, one of the clear attractions of the “sin stocks” has been, and continues to be, dividend income and the current yield of 6.8% is comfortably covered. Meanwhile, the inelastic demand which accompanies the nature of the underlying product gives BATs strong pricing power. A blue-chip poised for major rally Can investment trust dividend heroes extend winning streak? Income hunters can find great funds on ii’s Super 60 recommended list of investments The twin concerns which have followed the stock are regulation in general and the company’s own debt pile, the latter of which is within the company’s control and where BATs is showing some signs of focus. The former of the concerns is out of its control, however, and there will inevitably be more regulatory pressure as time goes on. In the meantime, the company is certainly making hay while the sun shines, even though the share price has been under immense pressure. In the year to date (and from a much lower base) the shares have recovered by around 20%, while over the last year there has been an improvement of 10%, as compared to a 5.5% jump for the wider FTSE 100 index. This rollercoaster ride for the share price has strengthened the resolve of the BAT bulls further, where the market consensus of the shares as a ‘strong buy’ is still firmly in place.
muscletrade: 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: and if the BATS share price drops under £28, I'll buy more, even though I am so heavily stacked up on them already.
British American Tobacco share price data is direct from the London Stock Exchange
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