We’ve recently updated our valuation analysis.

British American Tobacco Valuation

Is BATS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

BATS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue4.4x
Enterprise Value/EBITDA9.7x
PEG Ratio1x

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for BATS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average18.5x
IMB Imperial Brands
12.6x6.7%UK£19.8b
DGE Diageo
26.3x9.2%UK£85.5b
MO Altria Group
17.1x18.8%US$80.2b
ABF Associated British Foods
17.9x12.7%UK£12.5b
BATS British American Tobacco
13.9x13.5%UK£74.9b

Price-To-Earnings vs Peers: BATS is good value based on its Price-To-Earnings Ratio (13.9x) compared to the peer average (18.5x).


Price to Earnings Ratio vs Industry

How does BATS's PE Ratio compare vs other companies in the Global Tobacco Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
Industry Avg.n/a9.4%
n/an/an/a

Price-To-Earnings vs Industry: BATS is expensive based on its Price-To-Earnings Ratio (13.9x) compared to the Global Tobacco industry average (11.5x)


Price to Earnings Ratio vs Fair Ratio

What is BATS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BATS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio13.9x
Fair PE Ratio22.7x

Price-To-Earnings vs Fair Ratio: BATS is good value based on its Price-To-Earnings Ratio (13.9x) compared to the estimated Fair Price-To-Earnings Ratio (22.7x).


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 (£33.56) is trading below our estimate of fair value (£97.48)

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


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£33.56
UK£41.00
+22.2%
9.1%UK£48.00UK£35.00n/a19
Nov ’23UK£34.65
UK£41.19
+18.9%
9.2%UK£48.00UK£35.00n/a18
Oct ’23UK£32.27
UK£41.14
+27.5%
8.1%UK£46.40UK£35.00n/a18
Sep ’23UK£34.46
UK£41.05
+19.1%
8.2%UK£46.40UK£35.00n/a17
Aug ’23UK£32.30
UK£40.87
+26.5%
7.8%UK£46.40UK£35.00n/a17
Jul ’23UK£35.36
UK£39.57
+11.9%
8.7%UK£46.40UK£31.00n/a17
Jun ’23UK£35.37
UK£38.70
+9.4%
7.1%UK£43.81UK£31.00n/a17
May ’23UK£33.52
UK£38.21
+14.0%
7.2%UK£43.81UK£31.00n/a17
Apr ’23UK£32.26
UK£38.21
+18.5%
7.2%UK£43.81UK£31.00n/a17
Mar ’23UK£32.38
UK£38.53
+19.0%
6.8%UK£43.81UK£33.00n/a17
Feb ’23UK£31.74
UK£36.71
+15.7%
10.9%UK£44.10UK£28.50n/a18
Jan ’23UK£27.34
UK£35.90
+31.4%
11.9%UK£44.10UK£28.50n/a18
Dec ’22UK£25.62
UK£35.34
+38.0%
14.8%UK£45.13UK£22.43n/a18
Nov ’22UK£25.53
UK£35.42
+38.8%
14.5%UK£45.13UK£22.43UK£34.6518
Oct ’22UK£25.40
UK£35.01
+37.9%
15.3%UK£45.13UK£21.08UK£32.2719
Sep ’22UK£27.06
UK£35.06
+29.6%
15.2%UK£45.13UK£21.08UK£34.4619
Aug ’22UK£26.81
UK£35.58
+32.7%
12.4%UK£45.54UK£28.50UK£32.3019
Jul ’22UK£28.28
UK£35.03
+23.9%
15.8%UK£46.31UK£21.90UK£35.3619
Jun ’22UK£27.15
UK£34.73
+27.9%
15.6%UK£43.81UK£21.90UK£35.3719
May ’22UK£26.82
UK£35.21
+31.3%
16.1%UK£44.20UK£21.90UK£33.5220
Apr ’22UK£27.16
UK£35.58
+31.0%
15.5%UK£44.20UK£21.90UK£32.2621
Mar ’22UK£25.47
UK£35.41
+39.0%
16.3%UK£45.04UK£21.90UK£32.3821
Feb ’22UK£26.45
UK£36.62
+38.4%
15.0%UK£46.00UK£21.90UK£31.7422
Jan ’22UK£27.08
UK£36.43
+34.5%
14.9%UK£46.00UK£21.90UK£27.3421
Dec ’21UK£26.61
UK£36.33
+36.5%
15.5%UK£46.00UK£22.31UK£25.6221
Nov ’21UK£24.48
UK£36.33
+48.4%
15.5%UK£46.00UK£22.31UK£25.5321

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


Discover undervalued companies