revenue growth
—
Q1 2026
official guidance
British American Tobacco p.l.c.
Last · LSE£43.91+1.31 (+3.08%)live · yahoo · 2h ago
Market cap£94.4B2.15B sh
P/E · TTM15.1fwd 11.4 · eps 2.91
Beta0.10vs S&P 500
Div yield5.80%annual · TTM
52w range
£37.17£53.68
Volume718.6Ksession
| Revenue | £25.6B |
|---|---|
| Operating income | £10.0B |
| Net income | £7.8B |
| Free cash flow | £5.8B |
| Operating margin | 39.0% |
| Net margin | 30.3% |
| Return on equity | 16.9% |
| Period | 2025 |
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
Strong BuyBuyHoldSellStrong Sell
Promising U.S. nicotine momentum is offset by weak Heated Products, APMEA execution risk, and largely unquantified regulatory upside.
Hold: BAT’s operating momentum is improving, with New Category revenue expected to grow at a mid-teens rate in 2026, U.S.
Vapour at double-digit growth, and leverage targeted at 2–2.5x net debt/EBITDA by year-end. However, the call offered no upgrade to group guidance, while Heated Products revenue is expected to fall by a low-double-digit rate, APMEA recovery remains delayed, and the FDA upside is still dependent on implementation and enforcement.
Themes
- New Categories
- Modern Oral
- Velo Plus
- U S Vapour
- Fda Enforcement
- Heated Products
Near term
Q2 and H2 rollout of Velo Max, with U.S. market availability targeted for August–September.
U.S. Vuse flavoured products are expected to reach the market in Q3, but management said these launches will contribute mainly in the final quarter.
State-level U.S. Vapour enforcement and FDA product-list guidance could determine whether legal-market growth continues.
Japan distributor inventory adjustments are expected to weigh on Heated Products throughout 2026 rather than reverse in H2.
Further U.S. Doral rollout across six additional states, and potentially more, will depend on local economics and could affect cigarette mix.
July 30 half-year results will test whether the strong H1 start can offset the explicitly H2-weighted group profit profile.
Longer term
Velo has a credible growth position: 38.2% volume share across top Modern Oral markets, up 740 basis points year to date, while U.S. Velo Plus reached 28.4% volume share and retained a 70% repurchase rate.
The U.S. Modern Oral opportunity remains structurally attractive because management cited both consumer-base expansion and rising pouch consumption, but management declined to provide a 12–18 month share target.
FDA prioritisation, PMTA review, and stronger enforcement could allow BAT to recapture value from the U.S. illicit Vapour market, which management estimates at roughly 70% of the market or approximately £7 billion.
Fit2Win is expected to deliver £500 million of annualised savings by the end of 2027 and £600 million by 2028, supporting the deleveraging and shareholder-return thesis.
Heated Products remains the key portfolio turnaround test: glo Hilo is gaining premium share, but glo’s overall volume share fell 1.6 percentage points in top markets and competitive intensity remains high.
The competitive moat is strongest in Modern Oral and Vapour, but glo’s share losses and the need for discounts show that BAT’s cross-category execution is not uniformly differentiated.
Red flags
The largest U.S. Vapour opportunity depends on enforcement against illicit products and regulatory implementation; management quantified the prize but provided no timetable or earnings bridge.
Management gave no concrete U.S. Modern Oral share target despite analyst questioning, relying instead on broad category-growth assumptions.
Heated Products revenue is now expected to decline by a low-double-digit rate for both H1 and the full year; management said Japan inventory adjustment is not simply a one-off rebound issue.
APMEA recovery is slower than expected, with Bangladesh weakness following a major excise hike, duty-free pressure, and Australia still a headwind; the region remains a drag on 2026.
U.S. combustibles volume share declined 80 basis points and value share 20 basis points, with further Doral expansion dependent on economics and the risk of internal value destruction.
Middle East disruption has not yet affected U.S. consumer behaviour, but management acknowledged historical correlation between higher gas prices and weaker cigarette consumption.
Forward outlook
revenue growth
—
FY 2026
official guidance
revenue growth
—
Q1 2026
official guidance
revenue growth
—
FY 2026
official guidance
revenue growth
—
Q1 2026
official guidance
revenue growth
—
FY 2026
official guidance
Recommendation history
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
From latest ANNUAL · 2026-04-27
- Current Ratio Low
Red flags
- Current Ratio Low — Current ratio 0.87
Earnings transcripts
Press & signals
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British American Tobacco slashes 9,000 jobs
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Fisker went bankrupt and owners built an open source car company from the ashes
Documents
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—2026-11-030