UK-based British American Tobacco PLC (GB:BATS) confirmed that its FY24 performance is on track with its forecasts. The company expects low-single-digit organic revenue and profit growth for FY24. Moving ahead, BAT remains focused on achieving its mid-term guidance of 3-5% revenue growth and mid-single-digit adjusted profit growth on an organic, constant currency basis by 2026. Following the announcement, BAT shares gained 0.94% as of writing.
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BAT manufactures cigarettes, tobacco, and nicotine products and owns brands like Dunhill, Camel, and Newport, as well as new products like Vuse, glo, and Velo.
BAT Seeks Growth with New Categories and Tobacco Sales
In its pre-close statement, BAT expressed optimism for a better second half, driven by its New Categories portfolio and growth in traditional tobacco products across key markets.
The company reported advancements in its New Categories division, especially in vapour, heated tobacco, and modern oral products. Its Vuse vapour brand maintained global market leadership with a 40.3% value share. However, the U.S. market faced challenges from illegal vapour products. The company also mentioned that it is advancing toward its goal of becoming primarily smokeless by 2035.
Despite a challenging macroeconomic environment, the company attributes its positive momentum to investments in the U.S. and changes in wholesalers’ stock levels. The company has also benefitted from its strong prices across all its markets. Together, this has contributed to improved Combustibles’ organic volume and financial performance in the second half.
Is BAT a Good Stock to Buy?
Analysts remain cautious on BAT shares, with hardly any growth expected. Following the update, Morgan Stanley’s Rashad Kawan reiterated a Sell rating, forecasting a 16.4% downside. Kawan mentioned that the update offered no new information and expects little movement in the stock in today’s trading.
Overall on TipRanks, BATS stock has a Hold consensus rating backed by three Holds, two buys, and one sell recommendation. The BATS share price prediction is 2,991.67p, which is almost similar to the current trading levels.
