British American Tobacco: No Change In Guidance After H1; 6.2% Dividend Yield
(Preview) Company Update (BATS LN) (Buy)
Summary
British American Tobacco has maintained its 2022 guidance in its update, so EPS is still expected to grow mid single digits ex-currency.
Macro headwinds and tough prior-year comparables mean industry volume outlook was cut globally and seen as uncertain in the U.S.
BAT has overtaken Juul in U.S. Vapour, but has fallen further in Heated Tobacco in Japan and in nicotine pouches in the U.S.
Competitive pressures will intensify from Philip Morris, though our base case is still one of relative stability in U.S. cigarette volumes.
With BAT shares at 3,518.0p, we expect a total return of 45% (12.9%annualized) by 2025 year-end. The Dividend Yield is 6.2%. Buy.
Introduction
British American Tobacco p.l.c. (referred here as "BAT") released their H1 2022 pre-close update this morning (Thursday, June 9). BAT shares are down 1.4% in London (as of 1 pm local time).
Measured in GBP and including dividends, BAT shares have gained 57% (75% in USD) since we upgraded our rating to Buy in March 2020, and…