British American Tobacco p.l.c.

BATS-CHIXE:BATSL Stock Report

Market Cap: UK£66.0b

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-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales 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.

Below Fair Value: BATSL (£29.9) is trading below our estimate of fair value (£66.92)

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 unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for BATSL. This is calculated by dividing BATSL's market cap by their current revenue.
What is BATSL's PS Ratio?
PS Ratio2.5x
SalesUK£26.18b
Market CapUK£66.01b

Price to Sales Ratio vs Peers

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

The above table shows the PS ratio for BATSL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average2.5x
IMB Imperial Brands
1.2x-15.9%UK£21.6b
DGE Diageo
3.3x3.5%UK£52.5b
ABF Associated British Foods
0.8x3.5%UK£16.2b
MO Altria Group
4.8x1.0%US$96.2b
BATSL British American Tobacco
2.5x1.9%UK£66.0b

Price-To-Sales vs Peers: BATSL is expensive based on its Price-To-Sales Ratio (2.5x) compared to the peer average (2.5x).

Price to Sales Ratio vs Industry

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

11 CompaniesPrice / SalesEstimated GrowthMarket Cap
No. of Companies11PS01.63.24.86.48+
11 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: BATSL is expensive based on its Price-To-Sales Ratio (2.5x) compared to the Global Tobacco industry average (2.1x).

Price to Sales Ratio vs Fair Ratio

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

BATSL PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio2.5x
Fair PS Ratio8.6x

Price-To-Sales vs Fair Ratio: BATSL is good value based on its Price-To-Sales Ratio (2.5x) compared to the estimated Fair Price-To-Sales Ratio (8.6x).

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£29.90
UK£31.30
+4.7%
18.7%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£24.00n/a13
Jan ’25UK£22.94
UK£31.69
+38.2%
17.8%UK£43.00UK£23.00n/a15
Dec ’24UK£25.07
UK£35.06
+39.8%
15.4%UK£47.00UK£27.50n/a15
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
Jan ’24UK£32.95
UK£40.32
+22.4%
8.4%UK£48.00UK£35.00UK£22.9418
Dec ’23UK£33.92
UK£40.39
+19.1%
8.4%UK£48.00UK£35.00UK£25.0718
Nov ’23UK£34.66
UK£41.19
+18.9%
9.2%UK£48.00UK£35.00UK£24.7618

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

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