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what it is
British American Tobacco sells cigarettes and nicotine products like Vuse, Velo, Camel, and Newport around the world.
how it gets paid
Last year Bti made $3M in revenue. Combustibles was the main engine at $27.9B, or 86% of sales.
what just happened
The latest company result showed revenue down 5.2%, with disposals and currency doing the damage.
At a glance
A balance sheet — strong enough to weather a downturn
75/100 earnings predictability — reasonably predictable
11.3x trailing p/e — the market's not buying it — or you found a deal
5.4% dividend yield — cash in your pocket every quarter
11.0% return on capital — nothing to write home about
xvary composite: 70/100 — average
What they do
British American Tobacco sells cigarettes and nicotine products like Vuse, Velo, Camel, and Newport around the world.
This business wins because nicotine habits are sticky and its brands are everywhere. You do not need hypergrowth when an 86.0% operating margin lets a slow-grower print cash. Price stability is 95 out of 100, and beta is 0.7, which is market-speak for the stock usually moves less than the market — so what: your ride is calmer than most.
How they make money
$3M
annual revenue
Combustibles
$27.9B
0.0%
Vapour
$1.9B
+10.0%
Tobacco heating
$1.3B
+10.0%
Oral nicotine
$1.3B
+10.0%
The products that matter
global tobacco brand
Pall Mall
brand-level sales not shown
This snapshot does not include brand revenue, so you should treat Pall Mall as evidence of portfolio breadth, not a standalone thesis. What you can measure here is the parent: 75/100 predictability and a 5.4% yield.
portfolio breadth
global cigarette brand
Camel
brand-level sales not shown
Camel matters because BTI is a collection of brands, and this page does not show which ones drive the $126B market value. You are underwriting the portfolio, not a single label.
brand depth
menthol cigarette brand
Newport
regulatory sensitivity matters
BTI trades at 11.3x earnings and yields 5.4%, but neither number tells you how much Newport contributes. That missing split is part of the regulatory risk.
watch regulation
Key numbers
5.4%
dividend yield
Dividend yield → cash paid to shareholders each year relative to price → so what: you are being paid while waiting for a slow business.
11.3x
trailing p/e
P/E → price divided by earnings → so what: the stock is cheap versus the broader market, but cheap is normal for tobacco.
$40.9B
long-term debt
Long-term debt → money the company owes over many years → so what: BTI has leverage, even with an A balance sheet grade.
86.0%
operating margin
Operating margin → profit left after running the business → so what: this company keeps an absurd amount of each sales dollar.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 2 — safer than 80% of stocks
- price stability 95 / 100
- long-term debt $40.9B (25% of capital)
- return on equity 15% — $0.15 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in BTI 3 years ago → it's now worth $17,890.
The index would have given you $13,920.
source: institutional data · total return
What just happened
sales slipped
The latest company result showed revenue down 5.2%, with disposals and currency doing the damage.
Management said the decline was tied to the 2023 sale of Russia and Belarus operations plus translational FX headwinds. At the same time, new categories were roughly 14% of first-half revenue and likely grew at a double-digit rate.
$32.4B
ttm revenue
$5.30
trailing eps
86.0%
operating margin
the number that mattered
The key number was 14%: that is the share of first-half revenue coming from newer nicotine categories, which is where the future growth has to come from.
-
the business outlook for british american tobacco remains solid.during an early-december trading update, the company noted that it was reaffirming guidance for 2025.
-
however, it now expects sales to rise at a 2% clip, which is at the top end of its prior forecast of 1%-2% growth.the advance was likely driven by the new categories division, which includes vapor, tobacco heating, and modern oral goods.
-
that business, which accounted for roughly 14% of total first-half revenues, likely rose at a double-digit rate in the second half of 2025.
-
we think the growth was largely driven by recent rollouts of new products.
-
demand for modern oral goods remains robust.sales growth in the u.s. was probably fueled by an improving combustibles performance and strong demand for velo plus nicotine patches. we think growth in earnings per adr in the december half was supported by the higher sales and a good operating performance from the new categories segment.
source: company preliminary results, Feb. 2025; Yahoo Finance TTM data
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What could go wrong
the top risk is regulation and litigation on combustible tobacco brands.
high
regulation can hit volume and sentiment at the same time
BTI sells tobacco. That is the risk. Rules around menthol, nicotine, marketing, and health claims do not nibble at the edges of the thesis — they go at the center.
At 11.3x earnings, the stock looks cheap. A lasting hit to cash flow would make that multiple look less like a bargain and more like a warning.
med
the income case still sits on top of $40.9B in debt
Long-term debt equals 25% of capital. The balance sheet grade is A, which helps, but this is still a leveraged income story rather than a zero-drama one.
If cash generation weakens, the 5.4% yield stops looking like a gift and starts looking like compensation for balance-sheet risk.
med
cheap does not mean much upside from here
Shares trade at $57.02 while the 3–5 year midpoint target on this page is $50. The high target is $65. That is not a huge valuation gap.
If your entire thesis is that 11.3x earnings is too low, the target range says the easy rerating may have already happened.
med
the free snapshot is thin where business-mix detail should be
This page shows a $3M revenue field for a $126B company and no brand-level sales. That is not enough detail to underwrite the mix with confidence.
When the inputs are thin, your thesis has to stay simple: yield, valuation, balance sheet, and ownership. If you need more than that, you need more data.
BTI screens as cheap and stable, but the current price already sits above the $50 midpoint target and the business still carries $40.9B of long-term debt.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next earnings report
The date is not shown in this snapshot. What matters is whether the dividend, debt load, and predictability score still tell the same story after results.
metric
yield versus debt
A 5.4% yield looks generous until you put it next to $40.9B of long-term debt. Watch whether both still look comfortable after the next update.
trend
institutional buying streak
Net buying has lasted three straight quarters. If that streak breaks, one support beam under the stock gets thinner.
risk
combustible regulation and litigation
For a tobacco company, this is never background noise. If the rulebook changes, the 11.3x multiple can stay low for a long time.
Analyst rankings
earnings predictability
75 / 100
management and the business model have been steady. in human-speak, analysts think this company usually does what you expect.
risk rank
2
That puts BTI in the safer tier of stocks on this scale. You are still holding tobacco risk, but not a balance-sheet train wreck.
price stability
95 / 100
The shares have traded with unusual calm. For you, that means this behaves more like a defensive income stock than a momentum name.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 400 buyers vs. 298 sellers in 3q2025. total institutional holdings: 0.3B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$33
$66
$57
current price
$50
target midpoint · 12% from current · 3-5yr high: $65 (+15% · 9% ann'l return)
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