LSE:BATS

Stock Analysis Report

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Executive Summary

British American Tobacco p.l.c. provides cigarettes and other tobacco products worldwide. More Details


Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has British American Tobacco's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BATS has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.6%

BATS

-4.4%

GB Tobacco

-1.9%

GB Market


1 Year Return

-6.4%

BATS

-11.2%

GB Tobacco

-16.2%

GB Market

Return vs Industry: BATS exceeded the UK Tobacco industry which returned -7.9% over the past year.

Return vs Market: BATS exceeded the UK Market which returned -14.8% over the past year.


Shareholder returns

BATSIndustryMarket
7 Day-4.6%-4.4%-1.9%
30 Day-3.1%-3.2%0.7%
90 Day-6.3%-6.4%-4.8%
1 Year0.7%-6.4%-3.7%-11.2%-13.0%-16.2%
3 Year-36.3%-47.5%-37.5%-49.1%-9.4%-20.6%
5 Year-15.0%-34.7%-22.7%-41.8%13.5%-12.0%

Price Volatility Vs. Market

How volatile is British American Tobacco's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is British American Tobacco undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BATS (£25.44) is trading below our estimate of fair value (£52.67)

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


Price To Earnings Ratio

PE vs Industry: BATS is good value based on its PE Ratio (9.2x) compared to the XE Tobacco industry average (9.6x).

PE vs Market: BATS is good value based on its PE Ratio (9.2x) compared to the UK market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: BATS is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: BATS is good value based on its PB Ratio (0.8x) compared to the XE Tobacco industry average (1.2x).


Next Steps

Future Growth

How is British American Tobacco forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

7.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BATS's forecast earnings growth (7% per year) is above the savings rate (1.2%).

Earnings vs Market: BATS's earnings (7% per year) are forecast to grow slower than the UK market (24.2% per year).

High Growth Earnings: BATS's earnings are forecast to grow, but not significantly.

Revenue vs Market: BATS's revenue (3.6% per year) is forecast to grow slower than the UK market (6% per year).

High Growth Revenue: BATS's revenue (3.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BATS's Return on Equity is forecast to be low in 3 years time (12.1%).


Next Steps

Past Performance

How has British American Tobacco performed over the past 5 years?

10.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BATS has high quality earnings.

Growing Profit Margin: BATS's current net profit margins (24.4%) are lower than last year (24.6%).


Past Earnings Growth Analysis

Earnings Trend: BATS's earnings have grown by 10.3% per year over the past 5 years.

Accelerating Growth: BATS's earnings growth over the past year (3.1%) is below its 5-year average (10.3% per year).

Earnings vs Industry: BATS earnings growth over the past year (3.1%) exceeded the Tobacco industry 2%.


Return on Equity

High ROE: BATS's Return on Equity (9.4%) is considered low.


Next Steps

Financial Health

How is British American Tobacco's financial position?


Financial Position Analysis

Short Term Liabilities: BATS's short term assets (£16.6B) do not cover its short term liabilities (£18.5B).

Long Term Liabilities: BATS's short term assets (£16.6B) do not cover its long term liabilities (£64.7B).


Debt to Equity History and Analysis

Debt Level: BATS's debt to equity ratio (71.9%) is considered high.

Reducing Debt: BATS's debt to equity ratio has reduced from 251.1% to 71.9% over the past 5 years.

Debt Coverage: BATS's debt is well covered by operating cash flow (20.4%).

Interest Coverage: BATS's interest payments on its debt are well covered by EBIT (6.7x coverage).


Balance Sheet


Next Steps

Dividend

What is British American Tobacco current dividend yield, its reliability and sustainability?

8.27%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: BATS's dividend (8.27%) is higher than the bottom 25% of dividend payers in the UK market (1.83%).

High Dividend: BATS's dividend (8.27%) is in the top 25% of dividend payers in the UK market (5.32%)


Stability and Growth of Payments

Stable Dividend: BATS's dividend payments have been volatile in the past 10 years.

Growing Dividend: BATS's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (74.4%), BATS's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BATS's dividends in 3 years are forecast to be covered by earnings (65.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Jack Marie Henry Bowles (56 yo)

1.5yrs

Tenure

UK£5,138,000

Compensation

Mr. Jack Marie Henry David Bowles has been Chief Operating Officer for International Business (Excluding US) at British American Tobacco Plc since October 1, 2017 and has been its Member of the Management ...


CEO Compensation Analysis

Compensation vs Market: Jack Marie Henry's total compensation ($USD6.75M) is above average for companies of similar size in the UK market ($USD4.87M).

Compensation vs Earnings: Insufficient data to compare Jack Marie Henry's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Jack Marie Henry Bowles
CEO, Member of Management Board & Director1.5yrsUK£5.14m0.0094%
£ 5.5m
Tadeu Marroco
Finance Director1.17yrsUK£1.94m0.0025%
£ 1.4m
Kingsley Wheaton
Chief Marketing Officer & Member of Management Board8.75yrsno data0.0028%
£ 1.6m
Johan Vandermeulen
Regional Director of Europe & North Africa and Member of Management Board6.08yrsno data0.0028%
£ 1.6m
David O'Reilly
Director of Research & Science and Member of Management Board8.75yrsno data0.0028%
£ 1.6m
Alan Davy
Director of Operations & Member of Management Board7.58yrsno data0.0043%
£ 2.5m
Jerome Abelman
Director of Legal & External Affairs5.75yrsno data0.0036%
£ 2.1m
Luciano Comin
Regional Director for Americas & Sub-Saharan Africa and Member of Management Board1.75yrsno data0.0011%
£ 633.9k
Paul Lageweg
Director of New Categories & Member of Management Board1.75yrsno data0.0044%
£ 2.5m
Marina Bellini
Director of Digital & Information and Member of Management Board1.75yrsno data0%
£ 0
Guy Meldrum
President & CEO of Reynolds American and Member of Management Board1.75yrsno data0.00089%
£ 517.6k
In Hae
Director of Talent & Culture and Member of Management Board1.75yrsno data0.00062%
£ 360.6k

1.8yrs

Average Tenure

51.5yo

Average Age

Experienced Management: BATS's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Jack Marie Henry Bowles
CEO, Member of Management Board & Director1.5yrsUK£5.14m0.0094%
£ 5.5m
Tadeu Marroco
Finance Director1.17yrsUK£1.94m0.0025%
£ 1.4m
Jeremy S. Fowden
Independent Non-Executive Director1.08yrsUK£46.00k0.00017%
£ 98.9k
Richard George Burrows
Independent Chairman of the Board10.92yrsUK£832.00k0.00083%
£ 482.7k
Holly Koeppel
Independent Non-Executive Director3.25yrsUK£270.00k0.00037%
£ 215.2k
Luc Jobin
Independent Non-Executive Director3.25yrsUK£197.00k0.0020%
£ 1.2m
Susan Farr
Independent Non-Executive Director5.67yrsUK£124.00kno data
Karen Guerra
Independent Non-Executive Director0.083yrno datano data
Marion Helmes
Independent Non-Executive Director4.17yrsUK£133.00k0.00020%
£ 116.3k
Ming Kwan
Independent Non-Executive Director6.75yrsUK£181.00k0.00033%
£ 191.9k
Dimitri Panayotopoulos
Senior Independent Director0.50yrUK£170.00k0.00014%
£ 81.4k

3.3yrs

Average Tenure

63yo

Average Age

Experienced Board: BATS's board of directors are considered experienced (3.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: BATS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

British American Tobacco p.l.c.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: British American Tobacco p.l.c.
  • Ticker: BATS
  • Exchange: LSE
  • Founded: 1902
  • Industry: Tobacco
  • Sector: Food, Beverage & Tobacco
  • Market Cap: UK£58.157b
  • Shares outstanding: 2.29b
  • Website: https://www.bat.com

Number of Employees


Location

  • British American Tobacco p.l.c.
  • Globe House
  • 4 Temple Place
  • London
  • Greater London
  • WC2R 2PG
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BTAF.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDAug 1998
BATSLSE (London Stock Exchange)YesOrdinary SharesGBGBPAug 1998
BMTDB (Deutsche Boerse AG)YesOrdinary SharesDEEURAug 1998
BMTXTRA (XETRA Trading Platform)YesOrdinary SharesDEEURAug 1998
BTIJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARAug 1998
BATSLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPAug 1998
BTINYSE (New York Stock Exchange)LVL II ADR EACH REP 2 ORD GBP0.25(BNY)USUSDSep 1998
BMTADB (Deutsche Boerse AG)LVL II ADR EACH REP 2 ORD GBP0.25(BNY)DEEURSep 1998

Biography

British American Tobacco p.l.c. provides cigarettes and other tobacco products worldwide. It manufactures vapour and tobacco heating products; oral tobacco and nicotine products, such as snus, tobacco-free ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/21 21:03
End of Day Share Price2020/10/21 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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 here.