British American Tobacco p.l.c.

LSE:BATS Stock Report

Market Cap: UK£64.9b

British American Tobacco Valuation

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

Below Fair Value: BATS (£29.5) is trading below our estimate of fair value (£64.72)

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

Key Valuation Metric

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

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

The above table shows the Price to Sales ratio for BATS. This is calculated by dividing BATS's market cap by their current revenue.
What is BATS's PS Ratio?
PS Ratio2.5x
SalesUK£26.18b
Market CapUK£64.92b

Price to Sales Ratio vs Peers

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

The above table shows the PS ratio for BATS 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-16.0%UK£21.2b
DGE Diageo
3.5x3.2%UK£56.0b
ABF Associated British Foods
0.8x3.5%UK£15.3b
MO Altria Group
4.4x1.0%US$91.7b
BATS British American Tobacco
2.5x1.9%UK£65.1b

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

11 CompaniesPrice / SalesEstimated GrowthMarket Cap
BATS 2.5xIndustry Avg. 2.2xNo. of Companies11PS01.63.24.86.48+
11 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: BATS is expensive based on its Price-To-Sales Ratio (2.5x) compared to the Global Tobacco industry average (2.2x).

Price to Sales Ratio vs Fair Ratio

What is BATS'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.

BATS PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio2.5x
Fair PS Ratio8.7x

Price-To-Sales vs Fair Ratio: BATS is good value based on its Price-To-Sales Ratio (2.5x) compared to the estimated Fair Price-To-Sales Ratio (8.7x).

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 BATS forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£29.50
UK£32.45
+10.0%
16.0%UK£44.00UK£27.00n/a10
Dec ’25UK£29.88
UK£31.75
+6.2%
17.5%UK£44.00UK£25.00n/a10
Nov ’25UK£27.05
UK£31.30
+15.7%
18.7%UK£44.00UK£25.00n/a10
Oct ’25UK£27.55
UK£31.83
+15.5%
17.4%UK£44.00UK£25.50n/a10
Sep ’25UK£28.36
UK£31.56
+11.3%
17.2%UK£44.00UK£25.00n/a12
Aug ’25UK£27.97
UK£31.06
+11.1%
17.9%UK£44.00UK£25.00n/a12
Jul ’25UK£24.51
UK£30.67
+25.1%
18.9%UK£44.00UK£24.00n/a12
Jun ’25UK£24.15
UK£30.75
+27.3%
18.7%UK£44.00UK£24.00n/a12
May ’25UK£23.49
UK£31.13
+32.5%
19.9%UK£44.00UK£24.00n/a12
Apr ’25UK£24.06
UK£31.04
+29.0%
19.9%UK£44.00UK£24.00n/a12
Mar ’25UK£23.35
UK£31.12
+33.3%
19.2%UK£44.00UK£24.00n/a13
Feb ’25UK£23.40
UK£31.22
+33.4%
18.9%UK£44.00UK£24.00n/a13
Jan ’25UK£22.96
UK£31.69
+38.1%
17.8%UK£43.00UK£23.00n/a15
Dec ’24UK£25.08
UK£35.06
+39.8%
15.4%UK£47.00UK£27.50UK£29.8815
Nov ’24UK£24.75
UK£35.19
+42.2%
15.0%UK£47.00UK£27.50UK£27.0515
Oct ’24UK£25.77
UK£35.13
+36.3%
14.9%UK£47.00UK£27.50UK£27.5515
Sep ’24UK£26.08
UK£35.37
+35.6%
14.6%UK£47.00UK£27.50UK£28.3616
Aug ’24UK£26.13
UK£35.56
+36.1%
14.4%UK£47.00UK£27.50UK£27.9716
Jul ’24UK£26.08
UK£35.93
+37.8%
13.8%UK£47.00UK£27.50UK£24.5116
Jun ’24UK£25.58
UK£37.71
+47.4%
11.5%UK£47.00UK£28.00UK£24.1516
May ’24UK£29.27
UK£38.12
+30.2%
9.0%UK£47.00UK£31.00UK£23.4917
Apr ’24UK£28.41
UK£38.30
+34.8%
8.7%UK£47.00UK£31.00UK£24.0617
Mar ’24UK£31.30
UK£38.53
+23.1%
7.3%UK£47.00UK£35.00UK£23.3518
Feb ’24UK£31.17
UK£39.75
+27.5%
7.7%UK£47.00UK£35.00UK£23.4018
Jan ’24UK£32.82
UK£40.32
+22.9%
8.4%UK£48.00UK£35.00UK£22.9618
Dec ’23UK£33.91
UK£40.39
+19.1%
8.4%UK£48.00UK£35.00UK£25.0818

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

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/18 18:52
End of Day Share Price 2024/12/18 00:00
Earnings2024/06/30
Annual Earnings2023/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

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.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

British American Tobacco p.l.c. is covered by 47 analysts. 12 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Pierre-Yves GauthierAlphaValue
David ColemanArgus Research Company
Michael SteereAvior Capital Markets