British American Tobacco p.l.c.

LSE:0A76 Stock Report

Market Cap: US$82.1b

British American Tobacco Valuation

Is 0A76 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 0A76 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 0A76 ($37.34) is trading below our estimate of fair value ($84.23)

Significantly Below Fair Value: 0A76 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 0A76?

Key metric: As 0A76 is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for 0A76. This is calculated by dividing 0A76's market cap by their current revenue.
What is 0A76's PS Ratio?
PS Ratio2.5x
SalesUK£26.18b
Market CapUK£65.49b

Price to Sales Ratio vs Peers

How does 0A76's PS Ratio compare to its peers?

The above table shows the PS ratio for 0A76 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
1.1x-16.5%UK£21.0b
DGE Diageo
3.3x3.5%UK£53.3b
ABF Associated British Foods
0.8x3.5%UK£16.1b
MO Altria Group
4.7x1.0%US$95.0b
0A76 British American Tobacco
2.5x1.9%US$65.5b

Price-To-Sales vs Peers: 0A76 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 0A76's PS Ratio compare vs other companies in the Global Tobacco Industry?

11 CompaniesPrice / SalesEstimated GrowthMarket Cap
0A76 2.5xIndustry Avg. 2.1xNo. of Companies11PS01.63.24.86.48+
11 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: 0A76 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 0A76'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.

0A76 PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio2.5x
Fair PS Ratio8.6x

Price-To-Sales vs Fair Ratio: 0A76 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?

Analyst Forecast: Insufficient data to show price forecast.

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