LSE:BATS

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Established dividend payer and good value.


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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.5%

BATS

0.9%

GB Tobacco

2.5%

GB Market


1 Year Return

15.6%

BATS

6.9%

GB Tobacco

-12.4%

GB Market

Return vs Industry: BATS exceeded the UK Tobacco industry which returned 5.5% over the past year.

Return vs Market: BATS exceeded the UK Market which returned -11.7% over the past year.


Shareholder returns

BATSIndustryMarket
7 Day1.5%0.9%2.5%
30 Day1.3%-1.5%2.8%
90 Day4.1%2.4%-7.2%
1 Year24.2%15.6%15.9%6.9%-8.2%-12.4%
3 Year-32.4%-42.8%-34.7%-45.7%-5.9%-17.5%
5 Year17.9%-7.3%4.7%-19.6%12.5%-12.9%

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 (£31.9) is trading below our estimate of fair value (£80.31)

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


Price To Earnings Ratio

PE vs Industry: BATS is poor value based on its PE Ratio (12.8x) compared to the Tobacco industry average (9.1x).

PE vs Market: BATS is good value based on its PE Ratio (12.8x) compared to the UK market (14.7x).


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 (1.1x) 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 16 analysts?

10.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BATS's forecast earnings growth (10.1% per year) is above the savings rate (1.2%).

Earnings vs Market: BATS's earnings (10.1% per year) are forecast to grow slower than the UK market (20.3% per year).

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

Revenue vs Market: BATS's revenue (3.4% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: BATS's revenue (3.4% 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 (12.2%).


Next Steps

Past Performance

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

23.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BATS has high quality earnings.

Growing Profit Margin: BATS's current net profit margins (22%) are lower than last year (24.6%).


Past Earnings Growth Analysis

Earnings Trend: BATS's earnings have grown significantly by 23.2% per year over the past 5 years.

Accelerating Growth: BATS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BATS had negative earnings growth (-5.4%) over the past year, making it difficult to compare to the Tobacco industry average (1.4%).


Return on Equity

High ROE: BATS's Return on Equity (9.1%) 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 (£13.3B) do not cover its short term liabilities (£18.8B).

Long Term Liabilities: BATS's short term assets (£13.3B) do not cover its long term liabilities (£58.0B).


Debt to Equity History and Analysis

Debt Level: BATS's debt to equity ratio (69.8%) is considered high.

Reducing Debt: BATS's debt to equity ratio has reduced from 213.3% to 69.8% over the past 5 years.

Debt Coverage: BATS's debt is well covered by operating cash flow (20.1%).

Interest Coverage: BATS's interest payments on its debt are well covered by EBIT (6.3x coverage).


Balance Sheet


Next Steps

Dividend

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

6.60%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: BATS's dividend (6.6%) is higher than the bottom 25% of dividend payers in the UK market (2.04%).

High Dividend: BATS's dividend (6.6%) is in the top 25% of dividend payers in the UK market (5.73%)


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: At its current payout ratio (81.3%), BATS's 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 (65.2% payout ratio).


Next Steps

Management

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

5.5yrs

Average management tenure


CEO

Jack Marie Henry Bowles (55yo)

1.08yrs

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 ($USD6.33M) is above average for companies of similar size in the UK market ($USD4.55M).

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 & Director1.08yrsUK£5.14m0.0097% £7.2m
Tadeu Marroco
Finance Director0.75yrUK£1.94m0.0022% £1.6m
Kingsley Wheaton
Chief Marketing Officer & Member of Management Board8.33yrsno data0.0028% £2.1m
Johan Vandermeulen
Regional Director of Europe & North Africa and Member of Management Board5.67yrsno data0.0028% £2.1m
David O'Reilly
Director of Research & Science and Member of Management Board8.33yrsno data0.0028% £2.1m
Ricardo de Almeida Oberlander
Member of Management Board and President & CEO of Reynolds American Inc.7.33yrsno data0.0043% £3.2m
Alan Davy
Director of Operations & Member of Management Board7.17yrsno data0.0043% £3.2m
Jerome Abelman
Director of Legal & External Affairs5.33yrsno data0.0036% £2.7m
Luciano Comin
Regional Director for Americas & Sub-Saharan Africa and Member of Management Board1.33yrsno data0.0011% £800.7k
Paul Lageweg
Director of New Categories & Member of Management Board1.33yrsno data0.0044% £3.3m

5.5yrs

Average Tenure

53yo

Average Age

Experienced Management: BATS's management team is seasoned and experienced (5.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jack Marie Henry Bowles
CEO, Member of Management Board & Director1.08yrsUK£5.14m0.0097% £7.2m
Tadeu Marroco
Finance Director0.75yrUK£1.94m0.0022% £1.6m
Jeremy S. Fowden
Independent Non-Executive Director0.67yrUK£46.00k0.000090% £67.3k
Richard George Burrows
Independent Chairman of the Board10.5yrsUK£832.00k0.00083% £621.1k
Holly Koeppel
Independent Non-Executive Director2.83yrsUK£270.00k0.00037% £276.9k
Luc Jobin
Independent Non-Executive Director2.83yrsUK£197.00k0.0020% £1.5m
Susan Farr
Independent Non-Executive Director5.17yrsUK£124.00kno data
Marion Helmes
Independent Non-Executive Director3.75yrsUK£133.00k0.00020% £149.7k
Ming Kwan
Independent Non-Executive Director6.33yrsUK£181.00k0.00031% £232.0k
Dimitri Panayotopoulos
Senior Independent Director0.083yrUK£170.00k0.00014% £104.8k

2.8yrs

Average Tenure

61yo

Average Age

Experienced Board: BATS's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


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£74.832b
  • 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)SPONSORED ADRUSUSDSep 1998
BMTADB (Deutsche Boerse AG)SPONSORED ADRDEEURSep 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 nicotine pouches, and moist snuff; cigars; and e-cigarettes. The company offers its products under the Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport, Camel, Natural American Spirit, Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, Benson & Hedges, John Player Gold Leaf, State Express 555, and Shuang Xi brands. The company sells its products to retail outlets. British American Tobacco p.l.c. was founded in 1902 and is headquartered in London, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/29 21:08
End of Day Share Price2020/05/29 00:00
Earnings2019/12/31
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.