British American Tobacco: H1 2025 Pre-Close Update (Quick Note)

Company Update (BATS LN) (Buy): A mixed update befitting BAT’s <10x P/E and 7%+ Dividend Yield, with negative read-across for Altria.

British American Tobacco ("BAT") released its H1 2025 pre-close update this morning (June 3). Shares are currently down 0.4% in London but have risen 36.7% (in Pounds) in the past year:

BAT Share Price Performance (Last 1 Year)

Source: Google Finance (03-Jun-25).

We have maintained a Buy rating on BAT since March 2020, and it ceased to be part of our “Select 15” model portfolio as of January 2025 after a profitable exit. We have also exited our BAT position in real life.

We see BAT as a potential “value” investment but have little enthusiasm for its long-term business prospects, which means its investment case is more speculative and less suitable for our concentrated portfolio.

The update shows a small improvement in U.S. Combustibles and a potential U.S. breakout for Velo, but structural weaknesses remain and the overall picture is mixed at best. P/E is still less than 10x and the Dividend Yield is 7.2%.

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