1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Capital Allocation
PREMIUM
British American Tobacco reported in line results for first-half 2021. Both revenue and margins were in line with our forecasts, and we are reiterating our GBX 4,000 fair value estimate for the ordinary shares. The report was most remarkable for a step-up in growth in the new category business and for strong execution on the Quantum cost savings programme.
Following the acquisition of Reynolds American, British American Tobacco is neck-and-neck with Philip Morris International to be the largest listed global tobacco company--slightly larger than PMI on net revenue, but slightly smaller on volumes. British American's Global Drive Brands are Dunhill, Kent, Pall Mall, Lucky Strike, and Rothmans, and it also owns Newport and Camel in the U.S. The firm also sells vapor e-cigarettes, including its Vype brand, heated tobacco, with Glo, as well as roll- your-own and smokeless tobacco products. The company holds 31% of ITC Limited, the leading Indian cigarette-maker.
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