Based on the British American Tobacco stock forecasts from 8 analysts, the average analyst target price for British American Tobacco Stock is GBX 3,853.24 over the next 12 months. British American Tobacco PLC’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of British American Tobacco Stock is Neutral, which is based on 9 positive signals and 8 negative signals. At the last closing, British American Tobacco share price was GBX 3,471.00. British American Tobacco PLC’s stock price has changed by -57.50% over the past week, -59.50% over the past month and +25.28% over the last year.

British American Tobacco p.l.c. provides tobacco and nicotine products to consumers worldwide. It offers vapour, tobacco heating, and modern oral nicotine products; combustible products; and traditional oral products, such as snus and moist snuff.  It distributes its products to retail outlets. British American Tobacco p.l.c. was incorporated in 1902 and is headquartered in London, the United Kingdom.

What we like:

High market capitalization:

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Low volatility:

The British American Tobacco stock’s annual returns have been stable and consistent compared to its sector peers (for a hold period of at least 12 months) and is in the top quartile. Although stability is good, also keep in mind it can limit returns.

Underpriced compared to book value:

The British American Tobacco Stock is trading low compared to its peers on a price to book value basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Underpriced on cashflow basis:

The British American Tobacco Stock is trading low compared to its peers on a price to cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Low debt:

The company is less leveraged than its peers, and is among the top quartile, which makes it more flexible. However, do check the British American Tobacco share price forecast and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

Positive cash flow:

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow:

The company had positive total free cash flow in the most recent four quarters.

Superior Revenue Growth:

The British American Tobacco stock has shown top quartile revenue growth in the previous 5 years compared to its sector.

Superior Dividend Growth:

The British American Tobacco stock has shown top quartile dividend growth in the previous 5 years compared to its sector

What we don’t like:

Poor risk adjusted returns:

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.

Below median total returns:

The company has under performed its peers on annual average total returns in the past 5 years.

Below median dividend returns:

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings:

The British American Tobacco stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Poor return on equity:

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Poor capital utilization:

The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.

Poor return on assets:

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Overpriced on free cash flow basis:

The British American Tobacco stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.