Latest news with #TadeuMarroco
Yahoo
25-06-2025
- Business
- Yahoo
British American Tobacco (BTI) Leverages 6.1% Yield to Extend Railly
Over the past year, British American Tobacco (BTI) has gained 51%, driven in part by investor demand for reliable dividend income amid growing expectations of lower interest rates. High-quality dividend payers, such as BTI, which has boasted 29 consecutive years of dividend increases, tend to perform well in such environments. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter While the yield has decreased from a peak of 10% to 6.1%, primarily due to the share price rally, BTI's strong fundamentals suggest further upside potential. Here's a closer look at what continues to support the company's momentum and why I remain bullish on the tobacco giant. British American Tobacco's core combustible business, which includes brands like Camel and Lucky Strike, remains a powerhouse. In this month's 2025 half-year pre-close trading update, management reported a return to growth in the U.S., a critical market, driven by stronger delivery in combustibles. Organic sales for combustibles nudged up 0.1% at constant rates, with a 5.3% price/mix improvement offsetting a 5.2% volume decline. This resilience is a remarkable achievement for a 'struggling' tobacco major, as combustibles still account for over 80% of revenue. Despite global smoking rates dropping at a rate of mid-single digits annually, BTI's ability to raise prices and maintain margins showcases its pricing power. Additionally, CEO Tadeu Marroco highlighted cost savings of £402 million in 2024, which will help counter inflationary pressures, such as higher leaf prices, making the strong sales seem all the more impressive. Overall, with the U.S. market showing signs of stabilization, combustibles continue to fund BTI's transformation while delivering steady cash flows for dividends and buybacks. BTI's pivot to 'new categories', including vaping, heated tobacco, and oral nicotine products, is also gaining traction. The latest trading update highlighted an 8.9% organic revenue jump in these segments, with Velo Plus nicotine pouches leading the charge in the U.S. Management noted strong customer retention for Velo, which is closing the gap with Philip Morris's Zyn. Meanwhile, Glo Hilo, an upgraded heated tobacco device, is expanding into new markets, boosting competitiveness. Though new categories contribute less than 15% of revenue compared to Philip Morris's (PM) 40%, BTI's innovation is paying off, in my view. In fact, the company raised its 2025 revenue growth guidance to 1%-2% from 1%, citing better-than-expected first-half performance in modern oral products. The CEO's confidence in achieving 3-5% revenue growth by 2026 suggests that BTI's smokeless portfolio is no longer a side hustle, or a bet, as many would argue, but a meaningful growth driver. And while it is fair to criticize that vaping volumes dipped 9% in the first half, Vuse remains a U.S. market leader. BTI's focus on premiumization and innovation, such as synthetic nicotine in Velo Plus, positions it to capture market share in a rapidly evolving nicotine market. This segment's momentum suggests BTI is building a future beyond cigarettes. After a 57% rally, one might expect British American Tobacco (BTI) to look expensive—but it still trades at a forward P/E just under 11 while the sector median hovers at ~16, an attractive valuation even for a so-called 'sin' stock. On a trailing twelve-month basis, BTI's P/E ratio is currently 28, while the sector average is 22, indicating that although the market may view BTI as slightly overvalued today, the next twelve months appear promising. Moreover, the company continues to generate strong cash flow and has raised its dividend for 29 consecutive years. While the yield has declined from around 10% to 6.6%, this is a result of share price appreciation, not a dividend cut. In fact, if interest rates decline as expected, BTI's dependable yield could draw even more investor interest, potentially driving the stock higher. The company's $1 billion share buyback last year, while modest relative to its $108 billion market cap, enhances the total shareholder return. Factoring in the buyback, the blended yield rises to about 7.5%, offering even more appeal. Altogether, BTI's low valuation, strong income profile, and capital return strategy provide a compelling case for continued upside—with a margin of safety—even as the stock pushes toward new 52-week highs. Wall Street's stance on British American Tobacco is bearish, although with only a handful of analysts covering the stock. As things stand, BTI carries a Moderate Sell consensus based on one Sell rating in the past three months. BTI's average 12-month price target of $35.50 implies a potential downside of about 28%, suggesting that many analysts believe the stock may have already priced in much of its recent strength. Despite its 57% rally, BTI remains a strong investment option. With a 6.1% dividend yield, a valuation of less than 11x forward earnings, and solid cash flow supporting both dividends and share buybacks, BTI stands out among income-focused opportunities. Its core combustibles business remains resilient, while growth in smokeless products, such as Velo, signals a forward-looking pivot. While regulatory headwinds and the transition to next-gen products pose challenges, BTI's global footprint and disciplined capital strategy position it well for investors seeking reliable yield and potential upside, especially in a rate-cutting environment. Disclaimer & DisclosureReport an Issue Sign in to access your portfolio
Business Insider
24-06-2025
- Business
- Business Insider
British American Tobacco (BTI) Leverages 6.1% Yield to Extend Railly
Over the past year, British American Tobacco (BTI) has gained 51%, driven in part by investor demand for reliable dividend income amid growing expectations of lower interest rates. High-quality dividend payers, such as BTI, which has boasted 29 consecutive years of dividend increases, tend to perform well in such environments. Confident Investing Starts Here: While the yield has decreased from a peak of 10% to 6.1%, primarily due to the share price rally, BTI's strong fundamentals suggest further upside potential. Here's a closer look at what continues to support the company's momentum and why I remain bullish on the tobacco giant. Combustibles Represent Steady Cash Cow for BTI British American Tobacco's core combustible business, which includes brands like Camel and Lucky Strike, remains a powerhouse. In this month's 2025 half-year pre-close trading update, management reported a return to growth in the U.S., a critical market, driven by stronger delivery in combustibles. Organic sales for combustibles nudged up 0.1% at constant rates, with a 5.3% price/mix improvement offsetting a 5.2% volume decline. This resilience is a remarkable achievement for a 'struggling' tobacco major, as combustibles still account for over 80% of revenue. Despite global smoking rates dropping at a rate of mid-single digits annually, BTI's ability to raise prices and maintain margins showcases its pricing power. Additionally, CEO Tadeu Marroco highlighted cost savings of £402 million in 2024, which will help counter inflationary pressures, such as higher leaf prices, making the strong sales seem all the more impressive. Overall, with the U.S. market showing signs of stabilization, combustibles continue to fund BTI's transformation while delivering steady cash flows for dividends and buybacks. Smokeless Growth Accelerates to BTI's Advantage BTI's pivot to 'new categories', including vaping, heated tobacco, and oral nicotine products, is also gaining traction. The latest trading update highlighted an 8.9% organic revenue jump in these segments, with Velo Plus nicotine pouches leading the charge in the U.S. Management noted strong customer retention for Velo, which is closing the gap with Philip Morris's Zyn. Meanwhile, Glo Hilo, an upgraded heated tobacco device, is expanding into new markets, boosting competitiveness. Though new categories contribute less than 15% of revenue compared to Philip Morris's (PM) 40%, BTI's innovation is paying off, in my view. In fact, the company raised its 2025 revenue growth guidance to 1%-2% from 1%, citing better-than-expected first-half performance in modern oral products. The CEO's confidence in achieving 3-5% revenue growth by 2026 suggests that BTI's smokeless portfolio is no longer a side hustle, or a bet, as many would argue, but a meaningful growth driver. And while it is fair to criticize that vaping volumes dipped 9% in the first half, Vuse remains a U.S. market leader. BTI's focus on premiumization and innovation, such as synthetic nicotine in Velo Plus, positions it to capture market share in a rapidly evolving nicotine market. This segment's momentum suggests BTI is building a future beyond cigarettes. BTI Remains a Bargain Despite Its Recent Rally After a 57% rally, one might expect British American Tobacco (BTI) to look expensive—but it still trades at a forward P/E just under 11 while the sector median hovers at ~16, an attractive valuation even for a so-called 'sin' stock. On a trailing twelve-month basis, BTI's P/E ratio is currently 28, while the sector average is 22, indicating that although the market may view BTI as slightly overvalued today, the next twelve months appear promising. raised its dividend for 29 consecutive years. While the yield has declined from around 10% to 6.6%, this is a result of share price appreciation, not a dividend cut. In fact, if interest rates decline as expected, BTI's dependable yield could draw even more investor interest, potentially driving the stock higher. The company's $1 billion share buyback last year, while modest relative to its $108 billion market cap, enhances the total shareholder return. Factoring in the buyback, the blended yield rises to about 7.5%, offering even more appeal. Altogether, BTI's low valuation, strong income profile, and capital return strategy provide a compelling case for continued upside—with a margin of safety—even as the stock pushes toward new 52-week highs. What is the Price Target for BTI? Wall Street's stance on British American Tobacco is bearish, although with only a handful of analysts covering the stock. As things stand, BTI carries a Moderate Sell consensus based on one Sell rating in the past three months. BTI's average 12-month price target of $35.50 implies a potential downside of about 28%, suggesting that many analysts believe the stock may have already priced in much of its recent strength. BTI Offers Yield, Value, and Further Growth Potential Despite its 57% rally, BTI remains a strong investment option. With a 6.1% dividend yield, a valuation of less than 11x forward earnings, and solid cash flow supporting both dividends and share buybacks, BTI stands out among income-focused opportunities. Its core combustibles business remains resilient, while growth in smokeless products, such as Velo, signals a forward-looking pivot. While regulatory headwinds and the transition to next-gen products pose challenges, BTI's global footprint and disciplined capital strategy position it well for investors seeking reliable yield and potential upside, especially in a rate-cutting environment.
Time of India
15-06-2025
- Business
- Time of India
BAT may begin phased stake sale in ITC Hotels: Sources
British American Tobacco (BAT) is likely to begin a phased sale of its stake in ITC Hotels , following the hospitality company's demerger from ITC Limited earlier this year, sources told ET NOW. The sale could begin in the coming weeks, though the extent of the offloading remains unclear. The move aligns with BAT's earlier stance that it does not intend to be a long-term shareholder in ITC Hotels. The company currently holds a 14.55% stake in the recently demerged entity. The demerger of ITC Hotels from ITC Limited took effect on January 1, 2025, with January 6 set as the record date. Post-demerger, ITC retained a 40% stake in ITC Hotels. Sources said BAT intends to use proceeds from the stake sale to deleverage its balance sheet. The company had made a similar move in May, offloading a 2.5% stake in ITC Limited for approximately $1.4 billion, at Rs 413 per share. BAT CEO Tadeu Marroco had previously confirmed the company's lack of interest in holding onto its ITC Hotels stake, reinforcing expectations of a gradual exit. Live Events Also Read: These 11 Nifty microcap stocks can rally 55-210% in the next 12 months ITC Hotels reported a 19% year-on-year rise in consolidated net profit to Rs 257.85 crore for Q4 FY25, compared to Rs 216 crore a year earlier. Revenue from operations rose to Rs 1,060.62 crore from Rs 1,015.4 crore in the same period. For the full financial year 2024-25, the company posted a consolidated net profit of Rs 637.64 crore and revenue of Rs 3,559.81 crore. Also Read: Swiggy, Radico Khaitan among 7 stocks on which brokerages initiated coverage, see up to 34% upside On Friday (June 13), ITC Hotels shares declined 1.7% to close at Rs 213.9 on the BSE. Also Read: KEI Industries, DCB Bank among 10 small-cap stocks analysts expect to gain up to 75%
Sky News
09-06-2025
- Business
- Sky News
Tobacco giant BAT launches quest to smoke out next chairman
The FTSE-100 cigarette-maker British American Tobacco (BAT) is preparing to kick off the search for a new chairman. Sky News has learnt that the owner of Dunhill and Lucky Strike is in the process of picking headhunters to help identify a successor to Luc Jobin. Mr Jobin, a Canadian business veteran, has only chaired BAT since 2021. He has, however, been on its board since 2017, meaning he faces being 'timed out' by the middle of next year under UK corporate governance guidelines which state that directors are no longer deemed independent if they have served for more than nine years. The search for his successor is not expected to conclude until later this year or early 2026, according to insiders. With a market capitalisation of over £77bn, BAT remains one of the largest companies listed on the London Stock Exchange. It reported half-year results last week showing that full-year revenues were on track to exceed previous guidance to the City. The company's growth is being fuelled by so-called next-generation products such as Velo, a global brand of nicotine pouches. "In the US, I am very pleased that we expect to return to both revenue and profit growth in H1 and FY," Tadeu Marroco, BAT chief executive, said last week. "While Combustibles industry volume remains under pressure, we have stabilised our total industry volume and value share. "Excluding the deep discount segment where we are not present, we are gaining share, driven by Natural American Spirit and Lucky Strike."
North Wales Chronicle
03-06-2025
- Business
- North Wales Chronicle
Demand for oral nicotine pouches growing fast, British American Tobacco says
The Velo brand is growing the fastest within its so-called 'new category', which includes non-tobacco products like vapes, the business said. The pouches come in a variety of flavours and strengths and are designed to be placed between the gum and lip so nicotine can be absorbed through the mouth. Tadeu Marroco, BAT's chief executive, said he was 'excited' by the launch of loyalty scheme Velo Plus in the US. 'Globally, Velo continues to gain volume share in this fast-growing category, driven by the US and our continued leadership position in AME (Americas & Europe),' he said, highlighting a strong performance in the UK, Scandinavia and Poland. BAT said it was expecting full-year revenues to grow between 1% and 2% following a stronger-than-expected half-year performance. It had previously forecast growth of 1%. The company continues to make the bulk of its sales from traditional cigarettes, which include the Pall Mall and Camel brands. It said the segment remained 'under pressure' with the volume of sales about 9% lower across the industry over the year to date, but that it was gaining market share for brands including Lucky Strike. Mr Marroco said BAT's vape sales were being affected by 'illicit' products in the US and Canada, which were driving down sales of legal devices. BAT has previously warned that customers turning to illegal disposable vapes was hurting sales of its own vape product, Vuse, and urged a government crackdown on the market.
