British American Tobacco plc (BATS) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

British American Tobacco plc

Imperial Brands Plc

Why is British American Tobacco plc ?

High Management Efficiency with a high ROCE of 20.92%

High Debt Company with a Debt to Equity ratio (avg) at times

Poor long term growth as Net Sales has grown by an annual rate of 525.59% and Operating profit at 389.84% over the last 5 years
High Debt Company with a Debt to Equity ratio (avg) at times

Strong Long Term Fundamental Strength with an average Return on Capital Employed (ROCE) of 20.92%

Flat results in Dec 25

INTEREST(HY) At GBP 836 MM has Grown at 140.23%
OPERATING CASH FLOW(Y) Lowest at GBP 13,522 MM
RAW MATERIAL COST(Y) Grown by 13.16% (YoY)

With ROE of 6.08%, it has a very attractive valuation with a 1.99 Price to Book Value

Over the past year, while the stock has generated a return of 36.21%, its profits have fallen by -13.8%

Market Beating performance in long term as well as near term

Along with generating 36.21% returns in the last 1 year, the stock has outperformed FTSE 100 in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to British American Tobacco plc should be less than 10%
Overall Portfolio exposure to FMCG should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in FMCG)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is British American Tobacco plc for you?

Low Risk, Medium Return

Absolute

Risk Adjusted

Volatility

British American Tobacco plc

36.21%

0.93

23.34%

FTSE 100

13.98%

1.02

13.67%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

525.59%

EBIT Growth (5y)

389.84%

EBIT to Interest (avg)

6.98

Debt to EBITDA (avg)

2.22

Net Debt to Equity (avg)

0.62

Sales to Capital Employed (avg)

0.10

Tax Ratio

32.43%

Dividend Payout Ratio

69.81%

Pledged Shares

Institutional Holding

0.07%

ROCE (avg)

20.92%

ROE (avg)

34.18%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.99

EV to EBIT

44.73

EV to EBITDA

39.89

EV to Capital Employed

1.61

EV to Sales

13.16

PEG Ratio

Dividend Yield

144.73%

ROCE (Latest)

3.59%

ROE (Latest)

6.08%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Bullish

Dow Theory

Mildly Bearish

Mildly Bullish

OBV

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

11What is working for the Company

PRE-TAX PROFIT(Q)

At GBP 4,433 MM has Grown at 759.67%

NET PROFIT(Q)

At GBP 3,447.55 MM has Grown at 1,641.19%

ROCE(HY)

Highest at 15.74%

INTEREST COVERAGE RATIO(Q)

Highest at 764.59

INVENTORY TURNOVER RATIO(HY)

Highest at 2.19 times

-10What is not working for the Company

INTEREST(HY)

At GBP 836 MM has Grown at 140.23%

OPERATING CASH FLOW(Y)

Lowest at GBP 13,522 MM

RAW MATERIAL COST(Y)

Grown by 13.16% (YoY

CASH AND EQV(HY)

Lowest at GBP 3,843 MM

DEBTORS TURNOVER RATIO(HY)

Lowest at 6.45 times

DIVIDEND PER SHARE(HY)

Lowest at GBP 6.45

Here's what is working for British American Tobacco plc

Pre-Tax Profit

At GBP 4,433 MM has Grown at 759.67%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (GBP MM)

Net Profit

At GBP 3,447.55 MM has Grown at 1,641.19%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (GBP MM)

Interest Coverage Ratio

Highest at 764.59

in the last five periods

MOJO Watch

The company's ability to manage interest payments is improving

Operating Profit to Interest

Inventory Turnover Ratio

Highest at 2.19 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Here's what is not working for British American Tobacco plc

Interest

At GBP 836 MM has Grown at 140.23%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (GBP MM)

Operating Cash Flow

Lowest at GBP 13,522 MM

in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (GBP MM)

Cash and Eqv

Lowest at GBP 3,843 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debtors Turnover Ratio

Lowest at 6.45 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Dividend per share

Lowest at GBP 6.45

in the last five years

MOJO Watch

Company is distributing lower dividend than previous years

DPS (GBP)

Raw Material Cost

Grown by 13.16% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales