Shares of British American Tobacco PLC (GB:BATS) fell over 3% as of writing after the company stated that it is close to a potential settlement of all its ongoing tobacco lawsuits in Canada. According to the company’s update, BAT’s subsidiary, Imperial Tobacco Canada Limited (ITCAN), is undergoing a confidential court-supervised mediation process to settle.
BAT manufactures and sells cigarettes, tobacco, and various nicotine products. The company owns a range of well-known brands, like Dunhill, Camel, and Newport.
BAT Approaches Settlement for Canadian Tobacco Litigation
As ITCAN moves closer to a settlement, it indicated that this represents a significant milestone following its filing for protection under the Canadian Companies’ Creditors Arrangement Act (CCAA) in 2019.
BAT has now updated that the court-appointed mediator has filed a plan for compromise and arrangement with the Ontario Superior Court of Justice. The plan addresses all Canadian tobacco litigation and offers a complete resolution for BAT, its subsidiary, and affiliated entities.
This settlement will be financed using available cash and future revenue from tobacco product sales in Canada, while also aiming to maximize recovery for creditors. Additionally, it enables Canadian tobacco companies to maintain their operations for the benefit of all stakeholders.
What Is the Price Target for BAT Stock?
Today, analyst Damian McNeela from Deutsche Bank reiterated a Buy rating on the stock, predicting an upside of 32.3%.
Overall, BAT stock has received a Moderate Buy rating on TipRanks. It is based on five Buys, four Holds, and one Sell recommendation. The BAT share price target is 2,950p, which indicates a 12% growth at the current price level. Year-to-date, BATS stock has gained 12.55%.
