British American Tobacco's Positive FY26 Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2h ago
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Should l Buy BTI?
Source: seekingalpha
- 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.
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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.
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
Coca-Cola and Philip Morris: Dividend Investment Value
- Importance of Dividends: According to S&P Global, dividends have accounted for 31% of total stock market returns since 1926, highlighting their crucial role in long-term investing, allowing investors to focus on fundamentals while ignoring stock price fluctuations.
- Coca-Cola's Stability: As a blue-chip stock, Coca-Cola continues to deliver dividends with a third-quarter revenue growth of 5% year-over-year to $12.5 billion, demonstrating its strong resilience and profitability amid economic fluctuations.
- Philip Morris' Transformation: Philip Morris has pivoted to smoke-free products, which now account for 41% of its sales across 100 global markets, significantly expanding its distribution network following the $16 billion acquisition of Swedish Match in 2022, enhancing its competitive edge.
- Dividend Yield Comparison: Coca-Cola offers a dividend yield of 2.71%, while Philip Morris boasts a yield of 3.3%, both exceeding the S&P 500 average of 1.14%, showcasing their strong capabilities in returning value to investors.
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Consumer Staples as Safe Investments: Companies in the consumer staples sector are considered safe investments due to their consistent demand for essential goods, which leads to predictable revenue and lower volatility compared to other sectors.
Waste Management's Strong Dividend Performance: Waste Management Inc. has established a strong market position with a high dividend payout rate and a history of increasing payouts, making it an attractive option for investors seeking reliable income.
Service Corporation International's Growth Potential: Service Corporation International, a leading provider of funeral and cemetery services, benefits from a unique business model that allows for upfront payments, supporting a healthy dividend yield and capital growth.
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Dell, Heineken, and 28 Additional Selections for 2026 from the Barron’s Roundtable
Dramatic Start to 2026: The year has begun with significant tensions, likened to a transition from conflict to peace efforts.
Greenland's Political Situation: Greenland was on the verge of becoming the seventh state of New England, highlighting its unique geopolitical status.
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Distillate Capital Announces Q4 2025 Portfolio Adjustments
- Portfolio Changes: Distillate Capital's Q4 2025 rebalancing saw the U.S. Fundamental Stability & Value Composite purchase Bristol-Myers Squibb (BMY), Vistra (VST), and TE Connectivity (TEL), while divesting from Elevance Health (ELV), HCA Healthcare (HCA), and Lowe's Companies (LOW), indicating a strategic shift in healthcare and consumer sectors.
- Increases and Reductions: The U.S. FSV Strategy increased stakes in Uber Technologies (UBER), T-Mobile US (TMUS), and Marathon Petroleum (MPC), while trimming positions in Johnson & Johnson (JNJ), Merck & Co. (MRK), and Cisco Systems (CSCO), reflecting changing confidence in technology and energy sectors.
- Small Cap Investments: The U.S. Small/Mid Cap Quality & Value Composite acquired CF Industries Holdings (CF), Molson Coors Beverage (TAP), and Toll Brothers (TOL), exiting Range Resources (RRC), Gap (GAP), and TopBuild (BLD), showcasing a proactive approach towards small-cap stocks.
- International Investment Dynamics: The International Fundamental Stability & Value Composite acquired Agnico Eagle Mines (AEM), HD HYUNDAI, and Rio Tinto (RIO), while divesting from SK Hynix (HXSC.F), LVMH (LVMHF), and Aluminum Corporation of China (ALMMF), highlighting a focus on international mining and consumer goods.
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British American Tobacco (BTI) Extends Winning Streak to Seven Days with Nearly 8% Gain
- Stock Performance: British American Tobacco (BTI) closed 0.24% higher at $58.22 on Friday, marking its seventh consecutive day of gains since January 8, with a total increase of nearly 8%, indicating strong market confidence in its future performance.
- Industry Ranking: Jefferies has named BTI as its top pick in the global tobacco sector, citing the sustainability of its shift towards a smoke-free product portfolio, which is not fully priced in by the market, reflecting investor recognition of its strategic direction.
- Financial Outlook: BTI reaffirmed its 2026 guidance, targeting 3%-5% revenue growth and 5%-8% adjusted EPS growth, while planning a £1.3 billion stock buyback, demonstrating improved cash flow and capital flexibility.
- Market Challenges: Despite growth trends in new product categories, the FY2025 update indicates modest contributions, and BTI faces competitive pressure from illicit alternatives, highlighting ongoing structural declines in demand for traditional tobacco products.
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
Coca-Cola and Philip Morris: Dividend Investment Value
- Importance of Dividends: According to S&P Global, dividends have accounted for 31% of total stock market returns since 1926, highlighting their crucial role in long-term investing, allowing investors to focus on fundamentals while ignoring stock price fluctuations.
- Coca-Cola's Stability: As a blue-chip stock, Coca-Cola continues to deliver dividends with a third-quarter revenue growth of 5% year-over-year to $12.5 billion, demonstrating its strong resilience and profitability amid economic fluctuations.
- Philip Morris' Transformation: Philip Morris has pivoted to smoke-free products, which now account for 41% of its sales across 100 global markets, significantly expanding its distribution network following the $16 billion acquisition of Swedish Match in 2022, enhancing its competitive edge.
- Dividend Yield Comparison: Coca-Cola offers a dividend yield of 2.71%, while Philip Morris boasts a yield of 3.3%, both exceeding the S&P 500 average of 1.14%, showcasing their strong capabilities in returning value to investors.
See More
3 Consumer Staples with Dividends to Strengthen Your Portfolio
Defensive Stocks in Volatile Markets: Defensive stocks, particularly in the consumer staples sector, can help preserve capital during market downturns by limiting losses and providing reliable dividend income.
Consumer Staples as Safe Investments: Companies in the consumer staples sector are considered safe investments due to their consistent demand for essential goods, which leads to predictable revenue and lower volatility compared to other sectors.
Waste Management's Strong Dividend Performance: Waste Management Inc. has established a strong market position with a high dividend payout rate and a history of increasing payouts, making it an attractive option for investors seeking reliable income.
Service Corporation International's Growth Potential: Service Corporation International, a leading provider of funeral and cemetery services, benefits from a unique business model that allows for upfront payments, supporting a healthy dividend yield and capital growth.
See More
Dell, Heineken, and 28 Additional Selections for 2026 from the Barron’s Roundtable
Dramatic Start to 2026: The year has begun with significant tensions, likened to a transition from conflict to peace efforts.
Greenland's Political Situation: Greenland was on the verge of becoming the seventh state of New England, highlighting its unique geopolitical status.
See More
Distillate Capital Announces Q4 2025 Portfolio Adjustments
- Portfolio Changes: Distillate Capital's Q4 2025 rebalancing saw the U.S. Fundamental Stability & Value Composite purchase Bristol-Myers Squibb (BMY), Vistra (VST), and TE Connectivity (TEL), while divesting from Elevance Health (ELV), HCA Healthcare (HCA), and Lowe's Companies (LOW), indicating a strategic shift in healthcare and consumer sectors.
- Increases and Reductions: The U.S. FSV Strategy increased stakes in Uber Technologies (UBER), T-Mobile US (TMUS), and Marathon Petroleum (MPC), while trimming positions in Johnson & Johnson (JNJ), Merck & Co. (MRK), and Cisco Systems (CSCO), reflecting changing confidence in technology and energy sectors.
- Small Cap Investments: The U.S. Small/Mid Cap Quality & Value Composite acquired CF Industries Holdings (CF), Molson Coors Beverage (TAP), and Toll Brothers (TOL), exiting Range Resources (RRC), Gap (GAP), and TopBuild (BLD), showcasing a proactive approach towards small-cap stocks.
- International Investment Dynamics: The International Fundamental Stability & Value Composite acquired Agnico Eagle Mines (AEM), HD HYUNDAI, and Rio Tinto (RIO), while divesting from SK Hynix (HXSC.F), LVMH (LVMHF), and Aluminum Corporation of China (ALMMF), highlighting a focus on international mining and consumer goods.
See More
British American Tobacco (BTI) Extends Winning Streak to Seven Days with Nearly 8% Gain
- Stock Performance: British American Tobacco (BTI) closed 0.24% higher at $58.22 on Friday, marking its seventh consecutive day of gains since January 8, with a total increase of nearly 8%, indicating strong market confidence in its future performance.
- Industry Ranking: Jefferies has named BTI as its top pick in the global tobacco sector, citing the sustainability of its shift towards a smoke-free product portfolio, which is not fully priced in by the market, reflecting investor recognition of its strategic direction.
- Financial Outlook: BTI reaffirmed its 2026 guidance, targeting 3%-5% revenue growth and 5%-8% adjusted EPS growth, while planning a £1.3 billion stock buyback, demonstrating improved cash flow and capital flexibility.
- Market Challenges: Despite growth trends in new product categories, the FY2025 update indicates modest contributions, and BTI faces competitive pressure from illicit alternatives, highlighting ongoing structural declines in demand for traditional tobacco products.
See More
