British American Tobacco p.l.c.

BATS-CHIXE:BATSL Stock Report

Market Cap: UK£66.7b

British American Tobacco Valuation

Is BATSL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of BATSL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Discounted Cash Flow
Simply Wall St
UK£60.62
Fair Value
50.2% undervalued intrinsic discount
10
Number of Analysts

Below Fair Value: BATSL (£30.21) is trading below our estimate of fair value (£60.62)

Significantly Below Fair Value: BATSL is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BATSL?

Key metric: As BATSL is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for BATSL. This is calculated by dividing BATSL's market cap by their current earnings.
What is BATSL's PE Ratio?
PE Ratio22x
EarningsUK£3.03b
Market CapUK£66.67b

Price to Earnings Ratio vs Peers

How does BATSL's PE Ratio compare to its peers?

The above table shows the PE ratio for BATSL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average10.6x
IMB Imperial Brands
8.8x-4.8%UK£22.9b
DGE Diageo
16.4x7.2%UK£47.0b
MO Altria Group
8x-5.5%US$89.4b
ABF Associated British Foods
9.4x4.2%UK£13.6b
BATSL British American Tobacco
22x15.8%UK£66.7b

Price-To-Earnings vs Peers: BATSL is expensive based on its Price-To-Earnings Ratio (22x) compared to the peer average (10.6x).

Price to Earnings Ratio vs Industry

How does BATSL's PE Ratio compare vs other companies in the Global Tobacco Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
No. of Companies9PE01020304050+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: BATSL is expensive based on its Price-To-Earnings Ratio (22x) compared to the Global Tobacco industry average (11.4x).

Price to Earnings Ratio vs Fair Ratio

What is BATSL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BATSL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio22x
Fair PE Ratio24.2x

Price-To-Earnings vs Fair Ratio: BATSL is good value based on its Price-To-Earnings Ratio (22x) compared to the estimated Fair Price-To-Earnings Ratio (24.2x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst BATSL forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£30.21
UK£34.55
+14.4%
15.3%UK£44.00UK£27.00n/a10
Feb ’26UK£31.95
UK£33.35
+4.4%
16.4%UK£44.00UK£27.00n/a10
Jan ’26UK£28.74
UK£32.45
+12.9%
16.0%UK£44.00UK£27.00n/a10
Dec ’25UK£29.89
UK£31.75
+6.2%
17.5%UK£44.00UK£25.00n/a10
Nov ’25UK£27.04
UK£31.30
+15.7%
18.7%UK£44.00UK£25.00n/a10
Oct ’25UK£27.59
UK£31.83
+15.3%
17.4%UK£44.00UK£25.50n/a10
Sep ’25UK£28.37
UK£31.56
+11.3%
17.2%UK£44.00UK£25.00n/a12
Aug ’25UK£27.89
UK£31.06
+11.4%
17.9%UK£44.00UK£25.00n/a12
Jul ’25UK£24.54
UK£30.67
+25.0%
18.9%UK£44.00UK£24.00n/a12
Jun ’25UK£24.23
UK£30.75
+26.9%
18.7%UK£44.00UK£24.00n/a12
May ’25UK£23.44
UK£31.13
+32.8%
19.9%UK£44.00UK£24.00n/a12
Apr ’25UK£24.08
UK£31.04
+28.9%
19.9%UK£44.00UK£24.00n/a12
Mar ’25UK£23.38
UK£31.12
+33.1%
19.2%UK£44.00UK£24.00n/a13
Feb ’25UK£23.36
UK£31.22
+33.7%
18.9%UK£44.00UK£24.00UK£31.9513
Jan ’25UK£22.94
UK£31.69
+38.2%
17.8%UK£43.00UK£23.00UK£28.7415
Dec ’24UK£25.07
UK£35.06
+39.8%
15.4%UK£47.00UK£27.50UK£29.8915
Nov ’24UK£24.76
UK£35.19
+42.1%
15.0%UK£47.00UK£27.50UK£27.0415
Oct ’24UK£25.80
UK£35.13
+36.2%
14.9%UK£47.00UK£27.50UK£27.5915
Sep ’24UK£26.06
UK£35.37
+35.7%
14.6%UK£47.00UK£27.50UK£28.3716
Aug ’24UK£26.11
UK£35.56
+36.2%
14.4%UK£47.00UK£27.50UK£27.8916
Jul ’24UK£26.07
UK£35.93
+37.8%
13.8%UK£47.00UK£27.50UK£24.5416
Jun ’24UK£25.66
UK£37.71
+46.9%
11.5%UK£47.00UK£28.00UK£24.2316
May ’24UK£29.23
UK£38.12
+30.4%
9.0%UK£47.00UK£31.00UK£23.4417
Apr ’24UK£28.47
UK£38.30
+34.5%
8.7%UK£47.00UK£31.00UK£24.0817
Mar ’24UK£31.34
UK£38.53
+23.0%
7.3%UK£47.00UK£35.00UK£23.3818
Feb ’24UK£31.21
UK£39.75
+27.4%
7.7%UK£47.00UK£35.00UK£23.3618
Analyst Price Target
Consensus Narrative from 10 Analysts
UK£34.45
Fair Value
12.3% undervalued intrinsic discount
10
Number of Analysts

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2025/02/19 04:53
End of Day Share Price 2025/02/19 00:00
Earnings2024/12/31
Annual Earnings2024/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

British American Tobacco p.l.c. is covered by 42 analysts. 13 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
David ColemanArgus Research Company
Michael SteereAvior Capital Markets
Ishan MajumdarBaptista Research