British American Tobacco Valuation

Q: What is the Fair Price of BTI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

BTI ($37.38) is trading below our estimate of [[fair value]] ($82.66)

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

Valuation Score

4/6

Valuation Score 4/6

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

Below Fair Value: BTI ($37.38) is trading below our estimate of fair value ($82.66)

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

Key Valuation Metric

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

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

The above table shows the Price to Sales ratio for BTI. This is calculated by dividing BTI's market cap by their current revenue.
What is BTI's PS Ratio?
PS Ratio	2.5x
Sales	UK£26.18b
Market Cap	UK£65.49b

BTI 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/Revenue	3.8x
Enterprise Value/EBITDA	7.8x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

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

The above table shows the PS ratio for BTI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PS	Estimated Growth	Market Cap
Peer Average	3.3x
MO Altria Group	4.7x	1.0%	US$95.0b
PM Philip Morris International	5.4x	6.6%	US$204.0b
UVV Universal	0.5x	n/a	US$1.4b
TPB Turning Point Brands	2.7x	3.3%	US$1.1b
BTI British American Tobacco	2.5x	1.9%	US$65.5b

Price-To-Sales vs Peers: BTI is good value based on its Price-To-Sales Ratio (2.5x) compared to the peer average (3.3x).

Price to Sales Ratio vs Industry

How does BTI's PS Ratio compare vs other companies in the US Tobacco Industry?

4 Companies	Price / Sales	Estimated Growth	Market Cap
UVV Universal	0.5x	n/a	US$1.37b
PYYX Pyxus International	0.03x	n/a	US$61.77m
XXII 22nd Century Group	0.3x	n/a	US$4.59m
HPCO Hempacco	0.03x	n/a	US$133.26k

No more companies available in this PS range

4 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Sales vs Industry: BTI is expensive based on its Price-To-Sales Ratio (2.5x) compared to the Global Tobacco industry average (2.1x).

Price to Sales Ratio vs Fair Ratio

What is BTI'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.

BTI PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	2.5x
Fair PS Ratio	9.8x

Price-To-Sales vs Fair Ratio: BTI is good value based on its Price-To-Sales Ratio (2.5x) compared to the estimated Fair Price-To-Sales Ratio (9.8x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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