British American Tobacco
Previous valuations
Summary
The market for cigarettes faces a slow burn. By developing next-gen products and buying small rivals, British American Tobacco will burn out less slowly. Smokers will puff less but pay more over the next few years, but this won't be enough to prevent the market from sliding into terminal decline as policymakers push them to quit. Costs will rise, but the company's stable of desirable brands will help them raise prices simultaneously.
Stock: British American Tobacco PLC
Ticker: NYSE: BTI 0.00%↑ (ADR), LON: BATS
Date: August 15, 2022
Market cap: £74.7bn
Rating: Add
Price: £33.20
Target: £42.18
Setting the stage
British American Tobacco (BATS) is the world's biggest tobacco and smoking business. It makes money by producing and selling cigarettes and other nicotine products like vapes, electronic cigarettes that spew vapour instead of smoke. The company is global but gets most (46%) of its revenue from the United States. It owns popular brands like K…