British American Tobacco hits a 20-day low amid market strength
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 21 2024
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Should l Buy BTI?
Source: NASDAQ.COM
British American Tobacco plc (BTI) experienced a price decline of 3.01%, hitting a 20-day low during regular trading hours. This movement occurred despite the broader market's positive performance, with the Nasdaq-100 up 0.85% and the S&P 500 up 0.56%.
The decline in BTI's stock price is attributed to sector rotation, as investors appear to be shifting their focus away from tobacco stocks towards other sectors that are currently performing better. This shift is evident in the overall market trends, which have shown strength in technology and consumer discretionary sectors, contrasting with the performance of BTI.
Investors may need to reassess their positions in BTI as the stock's recent performance suggests a potential for further declines if the sector rotation continues. Monitoring market trends and sector performance will be crucial for making informed investment decisions.
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Analyst Views on BTI
About BTI
British American Tobacco p.l.c. is a global multi-category consumer goods business company. The Company provides tobacco and nicotine products. Its segments include the United States, Asia Pacific Middle East and Africa, and Americas and Europe. Its product categories include Vapor, Heating Products (HPs), Modern Oral, Traditional Oral, and Combustible cigarettes. Vapor products are handheld, battery-powered devices that heat a liquid to produce an inhalable aerosol, known as vapor. HPs are devices that use heat to generate a nicotine-containing aerosol, which the user inhales. This category includes Tobacco Heated Products and Herbal Products for Heating (HPH). Modern Oral products are smoke-free oral nicotine products called nicotine pouches, designed for use in the mouth. Traditional oral products include snus and snuff. Its brands include Vuse, glo, Velo, Grizzly, Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport, Natural American Spirit, Camel, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- New Categories Revenue Growth: Revenue from new categories accelerated to double-digit growth in H2, with a 7.0% annual increase and a 77.1% contribution rise to £442 million, showcasing the company's success in innovative product offerings.
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- Performance Outlook Confirmation: British American Tobacco reaffirms its fiscal 2026 outlook, expecting adjusted diluted EPS growth of 5% to 8%, indicating that performance will be at the lower end of the constant-currency range.
- Revenue Growth Expectations: The company anticipates revenue growth of 3% to 5% for fiscal 2026, reflecting ongoing market interest in tobacco and nicotine products despite industry challenges.
- Stock Price Dynamics: In pre-market trading, BTI shares were priced at $59.19, up 0.46% from the previous trading day, indicating cautious optimism among investors regarding the company's outlook.
- Market Reaction Analysis: Although the company's outlook is relatively conservative, the slight increase in stock price suggests that the market remains positively inclined towards its stable profitability and future growth potential, potentially attracting more investor attention.
See More
Organigram Proposes Acquisition of Sanity Group
- Acquisition Overview: Organigram plans to acquire German cannabis company Sanity Group for €113.4 million (approximately $134 million), comprising €80 million in cash and €33.4 million in Organigram shares, significantly enhancing its position in the global cannabis market.
- Financing Strategy: The acquisition will be financed through a combination of cash on hand, proceeds from a new credit facility, and expected equity investment, with Organigram in talks for a CAD 65.2 million (around $47.8 million) investment from British American Tobacco to support the cash component of the deal.
- Strategic Importance: Paolo De Luca, Chief Strategy Officer, stated that by combining strengths with Sanity, Organigram will accelerate growth in key European markets and create substantial value for shareholders, thereby strengthening its competitive edge in the world's largest federally legal cannabis markets.
- Market Performance Analysis: Despite a 7.09% increase in premarket trading to $1.36, Organigram's stock remains below its 20-day and 100-day simple moving averages, indicating a bearish trend in the short term, with key support at $1.00 and resistance at $1.50.
See More
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- Technical Analysis Tool: Comparing the latest share price to the 200-day moving average can provide valuable insights for investors, helping to assess market trends and identify potential buy or sell opportunities.
- ETF Unit Trading Mechanism: Exchange-traded funds (ETFs) trade like stocks, where investors are buying and selling 'units' that can be created or destroyed based on investor demand, impacting the liquidity and market performance of the ETF.
- Inflows and Outflows Monitoring: Weekly monitoring of changes in shares outstanding for ETFs helps identify those experiencing notable inflows (new units created) or outflows (old units destroyed), allowing assessment of their impact on underlying assets and market trends.
See More
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- Quarterly Dividend Announcement: British American Tobacco (BTI) declares a quarterly dividend of 61.26p per share, reflecting the company's robust cash flow and profitability, which is likely to attract more investor interest in its stock.
- Dividend Payment Schedule: The first dividend will be paid on May 7 for shareholders of record on March 27, with subsequent payments scheduled for August 14, November 6, and February 3 of the following year, ensuring shareholders receive consistent returns.
- Financial Performance: In its Q4 2025 report, British American Tobacco reported a GAAP EPS of 349.10p and revenue of £25.61 billion, demonstrating the company's strong performance and profitability in the market.
- Future Outlook: The company has set its outlook for FY26, indicating confidence in future growth while also reflecting its resilience in facing market challenges.
See More
British American Tobacco's Positive FY26 Outlook
- Financial Highlights: British American Tobacco reported FY GAAP EPS of 349.10p and revenue of £25.61 billion, reflecting a 1.0% year-over-year decline, indicating resilience amid market fluctuations.
- Consumer Growth: The company added 4.7 million consumers to its smokeless brands, bringing the total to 34.1 million, demonstrating increasing market acceptance of smokeless products and diversifying revenue streams.
- New Categories Revenue Growth: Revenue from new categories accelerated to double-digit growth in H2, with a 7.0% annual increase and a 77.1% contribution rise to £442 million, showcasing the company's success in innovative product offerings.
- Future Outlook: The global cigarette industry volume is expected to decline by approximately 2%, yet the company remains committed to achieving 3-5% revenue growth and 4-6% adjusted profit growth by 2026, reflecting confidence in future market conditions.
See More
