Fact based stock research
British American Tobacco (LSE:BATS)

GB0002875804

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

British American Tobacco stock research in summary

bat.com

ANALYSIS: With an Obermatt Combined Rank of 33 (worse than 67% compared with investment alternatives), British American Tobacco (Tobacco, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of British American Tobacco are a good value (attractively priced) with a consolidated Value Rank of 75 (better than 75% of alternatives) but show below-average growth (Growth Rank of 17), and are riskily financed (Safety Rank of 35), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 33, is a hold recommendation based on British American Tobacco's financial characteristics. As the company British American Tobacco's key financial metrics exhibit good value (Obermatt Value Rank of 75) but low growth (Obermatt Growth Rank of 17) and risky financing practices (Obermatt Safety Rank of 35), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 75% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	75
Growth Rank	17
Safety Rank	35
Combined Rank	33

Country	United Kingdom
Industry	Tobacco
Index	FTSE All Shares, FTSE 100, FTSE 350, Dividends Europe, Employee Focus EU, Diversity Europe, Human Rights, Recycling
Size class	XX-Large

This stock has achievements: Gold Winner CEO, Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: British American Tobacco

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	86	83	82	75
GROWTH
GROWTH	11	35	15	17
SAFETY
SAFETY	10	31	32	35
SENTIMENT
SENTIMENT	n/a	87	20	^new
360° VIEW
360° VIEW	n/a	75	14	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better British American Tobacco is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	86	83	82	75
GROWTH
GROWTH	11	35	15	17
SAFETY
SAFETY	10	31	32	35
COMBINED
COMBINED	10	49	29	33

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of British American Tobacco the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 75 (better than 75% compared with alternatives) for 2024, British American Tobacco shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for British American Tobacco. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 93 which means that the stock price compared with what market professionals expect for future profits is lower than for 93% of comparable companies, indicating a good value concerning British American Tobacco's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 75, and for Dividend Yield with a Dividend Yield Rank of 100. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 93% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 7). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 75, is a buy recommendation based on British American Tobacco's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that British American Tobacco has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing British American Tobacco shares. 9. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	48	20	18	7
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	76	91	95	93
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	74	82	80	75
DIVIDEND YIELD
DIVIDEND YIELD	100	100	100	100
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	86	83	82	75

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of British American Tobacco; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), British American Tobacco shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for British American Tobacco. Sales Growth has a below market rank of 8, which means that, currently, professionals expect the company to grow less than 92% of its competitors. The same is valid for Capital Growth, with a rank of 27, and Profit Growth, with a rank of 23. Currently, professionals expect the company to grow its profits less than 77% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 59, which means that the stock returns have recently been above 59% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for British American Tobacco, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	10	43	4	8
PROFIT GROWTH
PROFIT GROWTH	72	10	64	23
CAPITAL GROWTH
CAPITAL GROWTH	n/a	67	62	27
STOCK RETURNS
STOCK RETURNS	48	69	1	59
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	11	35	15	17

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of British American Tobacco.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 35 (better than 35% compared with alternatives), the company British American Tobacco has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of British American Tobacco is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for British American Tobacco. Liquidity is at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 23, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 77% of its competitors. Leverage is also high at a rank of 40, which means that the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 35 (worse than 65% compared with alternatives), British American Tobacco has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	13	50	52	40
REFINANCING
REFINANCING	61	17	23	23
LIQUIDITY
LIQUIDITY	63	37	38	55
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	10	31	32	35

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of British American Tobacco and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	75	67	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	17	6	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	96	40	^new
MARKET PULSE
MARKET PULSE	n/a	72	43	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	87	20	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for British American Tobacco.
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