# British American Tobacco (BATS.LSE)

Canonical: https://gigainvestors.com/s/BATS.LSE

Analysis as of: 2026-10-16T07:33:37.706Z. Financial observations: FY1996–FY2025.

Listing currency: GBX. Reporting currency: GBP.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: GBX 4,366.00 per share; close as of 2026-10-15.

Estimated value: low GBX 3,620.71 per share, central GBX 4,112.56 per share, high GBX 4,767.30 per share. Buy at or below the central value GBX 4,112.56 per share. Valuation as of 2026-10-16T07:33:37.706Z; scenarios are not confidence intervals.

Expected annual return: 9.6% at the stated quote. About 9.6% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; GB 10-year bond 5.4% + 4 points).

## Checklist

### understandable: fail

- 5 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 1

- Operating margin variation: 1.16×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.33×

- FY2017: 0.33×

- FY2018: 0.38×

- FY2019: 0.35×

- FY2020: 0.39×

- FY2021: 0.40×

- FY2022: 0.38×

- FY2023: -0.58×

- FY2024: 0.11×

- FY2025: 0.39×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 11.2%

- ROIC, second-lowest year: 6.2%

- Typical minus recent gross margin: -0.5 pp

- Typical gross margin (annual median): 82.4%

- Recent gross margin (lower of latest and 3-year median): 82.9%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.9%

- ROIC including acquisitions, ten-year median: 6.7%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 25.0%

- FY2017: 10.2%

- FY2018: 10.8%

- FY2019: 10.7%

- FY2020: 12.6%

- FY2021: 12.9%

- FY2022: 11.6%

- FY2023: -27.1%

- FY2024: 6.2%

- FY2025: 19.2%

### economics: pass

- Owner earnings / net income, 5-yr: 3.84×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: GBP 38B

- Net income, five-year total: GBP 9.9B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: -0.9 pp

- Working capital / revenue, change between three-year averages: -5.5 pp

- Working capital / revenue, final three-year average: -4.7%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.04×

- FY2022: 1.08×

- FY2023: -0.63×

- FY2024: 1.77×

- FY2025: 1.21×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 10.8% vs 6.2%

- Per-share earnings: 2.03 to 1.39 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.5%

- Ordinary dilution, 5-year annual growth: -0.9%

- Market cap gain: GBP -14B

- Cumulative retained earnings: GBP 20B

- Diluted shares, 10-year annual growth: -0.5%

- Diluted shares, 5-year annual growth: -0.9%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: -4.6%

- Per-share value change: GBP -0.63

- Per-share value, starting three-year median: GBP 2.03

- Per-share value, ending three-year median: GBP 1.39

- Buybacks concentrated in cheaper years (correlation): -0.09

- Average buyback yield: 0.6%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: GBP 127B

- Cumulative net income, 10 years: GBP 70B

- ROIC, first three-year median: 10.8%

- ROIC, last three-year median: 6.2%

Chart: Earnings per share; fiscal year observations.

- FY2016: GBP 2.03

- FY2017: GBP 16.36

- FY2018: GBP 2.63

- FY2019: GBP 2.49

- FY2020: GBP 2.79

- FY2021: GBP 2.96

- FY2022: GBP 2.95

- FY2023: GBP -6.44

- FY2024: GBP 1.39

- FY2025: GBP 3.54

### accounting: pass

- latest-year receivables to sales index (DSRI) exceeds 1.465

- Sloan accruals: 1.3%

- Receivables to sales index (DSRI): 1.51×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.82×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.81×

Chart: Sloan accruals; fiscal year observations.

- FY2016: 0.1%

- FY2017: 22.8%

- FY2018: -2.9%

- FY2019: -2.3%

- FY2020: -2.5%

- FY2021: -2.1%

- FY2022: -2.4%

- FY2023: -21.1%

- FY2024: -5.9%

- FY2025: 1.3%

## Holders

- [Sarah Ketterer](https://gigainvestors.com/CAU): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Price needs cash profits to grow 1.7% a year for ten years · "British American Tobacco hikes sales growth outlook for smokeless ranges" (uk.finance.yahoo.com, Jun 2026) · sales -1%

Story as of 2026-10-16T09:59:56.980Z; price observation 2026-10-15.

Price needs cash profits to grow 1.7% a year for ten years

- 2025-06-03: BAT lifts annual sales target as US demand improves ([uk.finance.yahoo.com](https://uk.finance.yahoo.com/news/bat-expects-return-us-growth-062331714.html))

- 2025-07-31: BAT affirms guidance after H1 beat on operating profit, revenue; shares climb ([finance.yahoo.com](https://finance.yahoo.com/news/bat-affirms-guidance-h1-beat-083827170.html))

- 2025-08-01: British American Tobacco (LSE:BATS) Reports GBP 4,512M Income with Revenue Growth Expectations ([finance.yahoo.com](https://finance.yahoo.com/news/british-american-tobacco-lse-bats-175123698.html))

- 2026-02-13: British American Tobacco Reshapes Costs With AI Push And South Africa Exit ([finance.yahoo.com](https://finance.yahoo.com/news/british-american-tobacco-reshapes-costs-031419617.html))

- 2026-06-02: British American Tobacco hikes sales growth outlook for smokeless ranges ([uk.finance.yahoo.com](https://uk.finance.yahoo.com/news/british-american-tobacco-hikes-sales-073309374.html))

### Sales · FY2024–2025

sales -1%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: GBP 14B 

- FY2017: GBP 20B 

- FY2018: GBP 24B 

- FY2019: GBP 26B 

- FY2020: GBP 26B 

- FY2021: GBP 26B 

- FY2022: GBP 28B 

- FY2023: GBP 27B 

- FY2024: GBP 26B 

- FY2025: GBP 26B 

### Gross margin · FY2025

gross margin 83.5%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 73.6% 

- FY2017: 74.3% 

- FY2018: 81.2% 

- FY2019: 82.8% 

- FY2020: 82.7% 

- FY2021: 82.1% 

- FY2022: 82.6% 

- FY2023: 82.1% 

- FY2024: 82.9% 

- FY2025: 83.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in tobacco; annual sales are GBP 25.6 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2025: revenue 25610000000; grossProfit 21384000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); BATS.LSE: British American Tobacco p.l.c. provides tobacco and nicotine products to consumers in the United States, Europe, Latin America, Canada, the Asia-Pacific, the Middle East, Central Asia, Caucasus, and Africa. The company offers vapour products; heated products, which consists of a battery-powered device and a plant-based substance consumable that is heated; modern oral products, such as nicotine pouches; combustibles, including cigarette sticks and other tobacco stick products; traditional oral products, such as snus and moist snuff; and fine cut/roll-your-own tobacco products. It sells its products under the Vuse, glo, Velo, Grizzly, Kodiak, Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport, Natural American Spirit, and Camel Snus brands, as well as Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, and State Express 555 brands. The company distributes its products to retail outlets. British American Tobacco p.l.c. was founded in 1902 and is headquartered in London, the United Kingdom.

### Why customers stay

Margins ranged from 82.1% to 83.5% during 2023–25; it earns 11.2% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2023: grossProfit / revenue = 82.1%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2024: grossProfit / revenue = 82.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2025: grossProfit / revenue = 83.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); 10-year return on capital observations [[2016,0.24987688106841552],[2017,0.10218163853962486],[2018,0.10819193601706237],[2019,0.10697943172694287],[2020,0.12579745544373247],[2021,0.12917318171049513],[2022,0.11614025864845094],[2023,-0.27083012297312004],[2024,0.062034734997011884],[2025,0.19242605998005577]]; median 0.11216609733275665. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 83% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); Gross margin observations: [[2021,0.8210169755489799],[2022,0.8262881938166696],[2023,0.8207308580434703]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back GBP 1.2 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2016: growth capex 43000000; upkeep 543000000; owner earnings 4648000000. Growth capex / owner earnings = 0.009251290877796902.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2017: growth capex 0; upkeep 791000000; owner earnings 37559000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2018: growth capex 0; upkeep 758000000; owner earnings 6312000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2019: growth capex 0; upkeep 815000000; owner earnings 6207000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2020: growth capex 0; upkeep 755000000; owner earnings 6791000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2021: growth capex 0; upkeep 745000000; owner earnings 7042800000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2022: growth capex 0; upkeep 656000000; owner earnings 7211600000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2023: growth capex 0; upkeep 460000000; owner earnings 9073400000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2024: growth capex 0; upkeep 608000000; owner earnings 5444000000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2025: growth capex 0; upkeep 551000000; owner earnings 9377200000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); Dividend observations: [[2016,2910000000],[2017,3465000000],[2018,4347000000],[2019,4598000000],[2020,4745000000],[2021,4904000000],[2022,4915000000],[2023,5114000000],[2024,5213000000],[2025,5238000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); FY2025: cash repurchases 1173000000 GBP.

### Are managers owners

Insiders own 6.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); BATS.LSE SharesStats.PercentInsiders = 6.612 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 1.7% yearly over ten years; actual growth was 8.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:33:37.706Z); Ten-year compound average after fade. Initial solved rate 0.010787080105216229. Price 4366; FX 100; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.8342346097191948 → FY2025 4.281087556576993. Closing-price date 2026-10-15.

## Monthly share-price history (GBX per share)

- 2016-10: GBX 4,691.50 per share

- 2016-11: GBX 4,393.50 per share

- 2016-12: GBX 4,621.50 per share

- 2017-01: GBX 4,899.50 per share

- 2017-02: GBX 5,080.00 per share

- 2017-03: GBX 5,300.00 per share

- 2017-04: GBX 5,215.00 per share

- 2017-05: GBX 5,530.00 per share

- 2017-06: GBX 5,234.00 per share

- 2017-07: GBX 4,713.50 per share

- 2017-08: GBX 4,831.00 per share

- 2017-09: GBX 4,672.00 per share

- 2017-10: GBX 4,871.00 per share

- 2017-11: GBX 4,689.00 per share

- 2017-12: GBX 5,018.00 per share

- 2018-01: GBX 4,819.00 per share

- 2018-02: GBX 4,295.50 per share

- 2018-03: GBX 4,131.00 per share

- 2018-04: GBX 3,999.00 per share

- 2018-05: GBX 3,869.00 per share

- 2018-06: GBX 3,830.00 per share

- 2018-07: GBX 4,201.00 per share

- 2018-08: GBX 3,721.50 per share

- 2018-09: GBX 3,584.50 per share

- 2018-10: GBX 3,393.50 per share

- 2018-11: GBX 2,750.00 per share

- 2018-12: GBX 2,500.00 per share

- 2019-01: GBX 2,687.00 per share

- 2019-02: GBX 2,758.50 per share

- 2019-03: GBX 3,194.00 per share

- 2019-04: GBX 2,990.00 per share

- 2019-05: GBX 2,760.00 per share

- 2019-06: GBX 2,749.00 per share

- 2019-07: GBX 2,952.00 per share

- 2019-08: GBX 2,880.00 per share

- 2019-09: GBX 3,007.50 per share

- 2019-10: GBX 2,702.00 per share

- 2019-11: GBX 3,060.00 per share

- 2019-12: GBX 3,231.50 per share

- 2020-01: GBX 3,357.50 per share

- 2020-02: GBX 3,062.50 per share

- 2020-03: GBX 2,759.00 per share

- 2020-04: GBX 3,080.50 per share

- 2020-05: GBX 3,189.50 per share

- 2020-06: GBX 3,104.50 per share

- 2020-07: GBX 2,524.50 per share

- 2020-08: GBX 2,532.50 per share

- 2020-09: GBX 2,777.50 per share

- 2020-10: GBX 2,448.00 per share

- 2020-11: GBX 2,639.50 per share

- 2020-12: GBX 2,708.00 per share

- 2021-01: GBX 2,657.50 per share

- 2021-02: GBX 2,485.50 per share

- 2021-03: GBX 2,774.00 per share

- 2021-04: GBX 2,682.00 per share

- 2021-05: GBX 2,713.00 per share

- 2021-06: GBX 2,800.00 per share

- 2021-07: GBX 2,680.50 per share

- 2021-08: GBX 2,729.00 per share

- 2021-09: GBX 2,604.00 per share

- 2021-10: GBX 2,546.50 per share

- 2021-11: GBX 2,530.00 per share

- 2021-12: GBX 2,733.50 per share

- 2022-01: GBX 3,163.50 per share

- 2022-02: GBX 3,261.50 per share

- 2022-03: GBX 3,194.50 per share

- 2022-04: GBX 3,352.00 per share

- 2022-05: GBX 3,502.00 per share

- 2022-06: GBX 3,519.50 per share

- 2022-07: GBX 3,220.50 per share

- 2022-08: GBX 3,451.50 per share

- 2022-09: GBX 3,226.50 per share

- 2022-10: GBX 3,433.50 per share

- 2022-11: GBX 3,391.00 per share

- 2022-12: GBX 3,281.50 per share

- 2023-01: GBX 3,096.00 per share

- 2023-02: GBX 3,143.50 per share

- 2023-03: GBX 2,840.50 per share

- 2023-04: GBX 2,927.00 per share

- 2023-05: GBX 2,554.50 per share

- 2023-06: GBX 2,608.00 per share

- 2023-07: GBX 2,615.50 per share

- 2023-08: GBX 2,622.50 per share

- 2023-09: GBX 2,577.00 per share

- 2023-10: GBX 2,454.00 per share

- 2023-11: GBX 2,512.00 per share

- 2023-12: GBX 2,295.50 per share

- 2024-01: GBX 2,338.50 per share

- 2024-02: GBX 2,345.00 per share

- 2024-03: GBX 2,406.00 per share

- 2024-04: GBX 2,351.00 per share

- 2024-05: GBX 2,415.00 per share

- 2024-06: GBX 2,430.00 per share

- 2024-07: GBX 2,745.00 per share

- 2024-08: GBX 2,836.00 per share

- 2024-09: GBX 2,724.00 per share

- 2024-10: GBX 2,695.00 per share

- 2024-11: GBX 2,988.00 per share

- 2024-12: GBX 2,880.00 per share

- 2025-01: GBX 3,197.00 per share

- 2025-02: GBX 3,087.00 per share

- 2025-03: GBX 3,182.00 per share

- 2025-04: GBX 3,248.00 per share

- 2025-05: GBX 3,334.00 per share

- 2025-06: GBX 3,463.00 per share

- 2025-07: GBX 4,040.00 per share

- 2025-08: GBX 4,185.00 per share

- 2025-09: GBX 3,947.00 per share

- 2025-10: GBX 3,904.00 per share

- 2025-11: GBX 4,421.00 per share

- 2025-12: GBX 4,214.00 per share

- 2026-01: GBX 4,376.00 per share

- 2026-02: GBX 4,640.00 per share

- 2026-03: GBX 4,371.00 per share

- 2026-04: GBX 4,323.00 per share

- 2026-05: GBX 4,591.00 per share

- 2026-06: GBX 4,677.00 per share

- 2026-07: GBX 4,570.00 per share

- 2026-08: GBX 4,129.00 per share

- 2026-09: GBX 4,129.00 per share

- 2026-10: GBX 4,225.00 per share

## Annual estimated value (GBX per share)

- FY2016: low GBX 1,827.02 per share, central GBX 2,070.69 per share, high GBX 2,395.27 per share

- FY2017: low GBX 4,105.64 per share, central GBX 5,929.92 per share, high GBX 6,947.40 per share

- FY2018: low GBX 3,749.85 per share, central GBX 4,266.51 per share, high GBX 4,954.28 per share

- FY2019: low GBX 4,030.74 per share, central GBX 4,577.49 per share, high GBX 5,305.33 per share

- FY2020: low GBX 3,304.92 per share, central GBX 3,750.63 per share, high GBX 4,343.97 per share

- FY2021: low GBX 3,268.34 per share, central GBX 3,712.12 per share, high GBX 4,302.89 per share

- FY2022: low GBX 3,548.89 per share, central GBX 4,029.57 per share, high GBX 4,669.46 per share

- FY2023: low GBX 3,625.19 per share, central GBX 4,110.87 per share, high GBX 4,757.40 per share

- FY2024: low GBX 3,382.12 per share, central GBX 3,848.44 per share, high GBX 4,469.21 per share

- FY2025: low GBX 3,550.42 per share, central GBX 4,033.59 per share, high GBX 4,676.79 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:39:24.212Z where newer inputs omit a numeric field or fiscal period.

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations

- [Sarah Ketterer](https://gigainvestors.com/CAU): 547,925 BTI shares; USD 33,840,000 reported position value; 0.37% of portfolio; add; quarter 2026 Q2.
- [Matthew McLennan](https://gigainvestors.com/FE): 1,718,852 BTI shares; USD 106,156,000 reported position value; 0.18% of portfolio; add; quarter 2026 Q2.
- [Lee Ainslie](https://gigainvestors.com/mc): 36,682 BTI shares; USD 2,265,000 reported position value; 0.02% of portfolio; add; quarter 2026 Q2.