LSE:BATS

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Established dividend payer and fair 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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.9%

BATS

4.3%

GB Tobacco

-0.3%

GB Market


1 Year Return

3.2%

BATS

-6.4%

GB Tobacco

3.9%

GB Market

Return vs Industry: BATS exceeded the UK Tobacco industry which returned -6.4% over the past year.

Return vs Market: BATS matched the UK Market which returned 3.9% over the past year.


Shareholder returns

BATSIndustryMarket
7 Day4.9%4.3%-0.3%
30 Day8.0%5.5%1.8%
90 Day-2.7%-4.9%4.9%
1 Year10.9%3.2%0.8%-6.4%9.3%3.9%
3 Year-20.6%-31.9%-24.0%-35.5%23.2%7.6%
5 Year-0.4%-21.0%-3.8%-24.4%34.3%3.8%

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 (£29.28) is trading below our estimate of fair value (£88.08)

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 (10.9x) compared to the Tobacco industry average (10.7x).

PE vs Market: BATS is good value based on its PE Ratio (10.9x) compared to the UK market (16.9x).


Price to Earnings Growth Ratio

PEG Ratio: BATS is poor value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: BATS is overvalued based on its PB Ratio (1x) compared to the XE Tobacco industry average (1x).


Next Steps

Future Growth

How is British American Tobacco forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

10.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BATS's forecast earnings growth (10.6% per year) is above the savings rate (1.2%).

Earnings vs Market: BATS's earnings (10.6% per year) are forecast to grow slower than the UK market (12.6% per year).

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

Revenue vs Market: BATS's revenue (4.2% per year) is forecast to grow faster than the UK market (3.8% per year).

High Growth Revenue: BATS's revenue (4.2% 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 (12.3%).


Next Steps

Past Performance

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

36.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BATS has high quality earnings.

Growing Profit Margin: BATS's current net profit margins (24.6%) are lower than last year (159.4%).


Past Earnings Growth Analysis

Earnings Trend: BATS's earnings have grown significantly by 36.4% 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 (-83.8%) over the past year, making it difficult to compare to the Tobacco industry average (-19.2%).


Return on Equity

High ROE: BATS's Return on Equity (9.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is British American Tobacco's financial position?


Financial Position Analysis

Short Term Liabilities: BATS's short term assets (£14.4B) do not cover its short term liabilities (£19.8B)

Long Term Liabilities: BATS's short term assets (14.4B) do not cover its long term liabilities (62.8B)


Debt to Equity History and Analysis

Debt Level: BATS's debt to equity ratio (76.7%) is considered high

Reducing Debt: BATS's debt to equity ratio has reduced from 220.9% to 76.7% over the past 5 years.

Debt Coverage: BATS's debt is not well covered by operating cash flow (17.4%).

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


Balance Sheet

Inventory Level: BATS has a low level of unsold assets or inventory.

Debt Coverage by Assets: BATS's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

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

6.93%

Current Dividend Yield


Upcoming Dividend Payment

Purchase British American Tobacco before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company6.9%marketbottom25%2.0%markettop25%5.3%industryaverage7.9%forecastin3Years7.8%

Current dividend yield vs market & industry

Notable Dividend: BATS's dividend (6.93%) is higher than the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: BATS's dividend (6.93%) is in the top 25% of dividend payers in the UK market (5.3%)


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 (73.9%), 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 (64.6% payout ratio).


Next Steps

Management

What is the CEO of British American Tobacco's salary, the management and board of directors tenure and is there insider trading?

5.0yrs

Average management tenure


CEO

Jack Marie Henry Bowles (55yo)

0.6yrs

Tenure

0

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  ...


Management Age and Tenure

5.0yrs

Average Tenure

53yo

Average Age

Experienced Management: BATS's management team is seasoned and experienced (5 years average tenure).


Board Age and Tenure

3.2yrs

Average Tenure

61.5yo

Average Age

Experienced Board: BATS's board of directors are considered experienced (3.2 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUK£11415 May 19
Alan Davy
EntityIndividual
Role
Chief Operating Officer
Director of Operations & Member of Management Board
Shares4
Max PriceUK£28.45
BuyUK£2,14410 Apr 19
Alan Davy
EntityIndividual
Role
Chief Operating Officer
Director of Operations & Member of Management Board
Shares69
Max PriceUK£31.08
SellUK£20,01110 Apr 19
Alan Davy
EntityIndividual
Role
Chief Operating Officer
Director of Operations & Member of Management Board
Shares640
Max PriceUK£31.27
BuyUK£19,88010 Apr 19
Alan Davy
EntityIndividual
Role
Chief Operating Officer
Director of Operations & Member of Management Board
Shares636
Max PriceUK£31.26
SellUK£25104 Apr 19
Jack Marie Henry Bowles
EntityIndividual
Role
Chief Executive Officer
CEO, Member of Management Board & Director
Shares8
Max PriceUK£31.35
SellUK£28204 Apr 19
Paul Lageweg
EntityIndividual
Role
Member of Management Board
Director of New Categories & Member of Management Board
Shares9
Max PriceUK£31.35
BuyUK£3,57703 Apr 19
David O'Reilly
EntityIndividual
Role
Member of Management Board
Director of Scientific Research & Member of Management Board
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Kingsley Wheaton
EntityIndividual
Role
Member of Management Board
Chief Marketing Officer & Member of Management Board
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Paul Lageweg
EntityIndividual
Role
Member of Management Board
Director of New Categories & Member of Management Board
Shares112
Max PriceUK£31.94
BuyUK£3,16203 Apr 19
Marina Bellini
EntityIndividual
Shares99
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
In Hae
EntityIndividual
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
John Stevens
EntityIndividual
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Jack Marie Henry Bowles
EntityIndividual
Role
Chief Executive Officer
CEO, Member of Management Board & Director
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Alan Davy
EntityIndividual
Role
Chief Operating Officer
Director of Operations & Member of Management Board
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Johan Vandermeulen
EntityIndividual
Role
Member of Management Board
Regional Director of Europe & North Africa and Member of Management Board
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Guy Meldrum
EntityIndividual
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Tadeu Marroco
EntityIndividual
Role
Member of the Board of Directors
Finance Director
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Jerome Abelman
EntityIndividual
Role
Member of Management Board
Director of Legal & External Affairs
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Luciano Comin
EntityIndividual
Role
Member of Management Board
Regional Director for Americas & Sub-Saharan Africa and Member of Management Board
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Ricardo de Almeida Oberlander
EntityIndividual
Role
Member of Management Board
Member of Management Board and President & CEO of Reynolds American Inc.
Shares112
Max PriceUK£31.94
BuyUK£3,57703 Apr 19
Nicandro Durante
EntityIndividual
Shares112
Max PriceUK£31.94
BuyUK£19,86406 Mar 19
John Stevens
EntityIndividual
Shares689
Max PriceUK£28.83
BuyUK£10911 Dec 18
Alan Davy
EntityIndividual
Role
Chief Operating Officer
Director of Operations & Member of Management Board
Shares4
Max PriceUK£27.26

Ownership Breakdown

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


Management Team

  • Ricardo de Almeida Oberlander (55yo)

    Member of Management Board and President & CEO of Reynolds American Inc.

    • Tenure: 6.8yrs
  • Jack Marie Henry Bowles (55yo)

    CEO, Member of Management Board & Director

    • Tenure: 0.6yrs
  • Kingsley Wheaton (46yo)

    Chief Marketing Officer & Member of Management Board

    • Tenure: 7.8yrs
  • Johan Vandermeulen (51yo)

    Regional Director of Europe & North Africa and Member of Management Board

    • Tenure: 5.2yrs
  • Alan Davy (55yo)

    Director of Operations & Member of Management Board

    • Tenure: 6.7yrs
  • David O'Reilly (53yo)

    Director of Scientific Research & Member of Management Board

    • Tenure: 7.8yrs
  • Tadeu Marroco (53yo)

    Finance Director

    • Tenure: 0.3yrs
  • Jerry Abelman (55yo)

    Director of Legal & External Affairs

    • Tenure: 4.8yrs
  • Luciano Comin (49yo)

    Regional Director for Americas & Sub-Saharan Africa and Member of Management Board

    • Tenure: 0.8yrs
  • Paul Lageweg (49yo)

    Director of New Categories & Member of Management Board

    • Tenure: 0.8yrs

Board Members

  • Richard George Burrows (73yo)

    Independent Chairman of the Board

    • Tenure: 10yrs
    • Compensation: UK£796.00k
  • Holly Koeppel (60yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£211.00k
  • Luc Jobin (59yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
    • Compensation: UK£158.00k
  • Sue Farr (63yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: UK£119.00k
  • Kieran Poynter (68yo)

    Senior Independent Director

    • Tenure: 3.1yrs
    • Compensation: UK£179.00k
  • Jack Marie Henry Bowles (55yo)

    CEO, Member of Management Board & Director

    • Tenure: 0.6yrs
  • Marion Helmes (54yo)

    Independent Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: UK£129.00k
  • Savio Kwan (71yo)

    Independent Non-Executive Director

    • Tenure: 5.8yrs
    • Compensation: UK£159.00k
  • Tadeu Marroco (53yo)

    Finance Director

    • Tenure: 0.3yrs
  • Dimitri Panayotopoulos (68yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: UK£160.00k

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£66.932b
  • 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 Analysis2019/11/12 20:34
End of Day Share Price2019/11/12 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.