British American Tobacco Stock (BATS.L, BTI): £1.3bn Buyback, 2026 Outlook, and What Analysts Forecast as of Dec. 21, 2025

Dec. 21, 2025 — British American Tobacco p.l.c. (BAT) heads into year-end with a familiar investor tug-of-war: the market loves the company’s cash returns (dividends + buybacks), but keeps side-eyeing the regulatory and competitive turbulence in “smokeless” products—especially in the United States.

With markets closed on Sunday, the latest reference point is Friday’s close (Dec. 19, 2025). BAT’s London-listed shares (LSE: BATS) ended the session at £42.36 (4,236p), down 1.14% on the day, even as the FTSE 100 rose. Trading volume was notably elevated versus the recent average—often a sign that investors are actively repositioning rather than simply drifting. ^[1]

On the U.S. side, the NYSE-listed ADR (BTI) closed at $56.45 (Dec. 19), with a 52-week range roughly spanning $34.82 to $59.29. ^[2]

So what’s driving the latest push-and-pull in British American Tobacco stock as of 21.12.2025? The answer sits in a dense knot of guidance, enforcement actions against illicit vapes, and a capital-return plan that keeps getting bigger.

Where BAT shares stand going into the final stretch of 2025

The clean headline: BAT shares remain near the top of their recent range, but they’ve cooled from late-November highs.

BATS (London): £42.36 close on Dec. 19; about 4.31% below its £44.27 52-week high reached on Nov. 28, 2025. ^[3]
BTI (New York ADR): $56.45 close on Dec. 19; near the upper end of its one-year band. ^[4]

That “near-the-highs” positioning matters, because December’s most consequential company update contained both a shareholder-friendly surprise (a large buyback) and a growth caution (2026 likely at the low end of targets)—a combination that tends to split the room. ^[5]

The biggest December catalyst: BAT’s pre-close update and a “low-end” 2026 outlook

On Dec. 9, 2025, BAT published its Full Year Pre-Close Trading Update, reaffirming direction for 2026 while acknowledging the real-world messiness of competing in U.S. vapor. ^[6]

What BAT said about 2025 performance

BAT now expects approximately 2% revenue growth and 2% adjusted profit from operations growth for FY2025 (on a constant-currency basis, as presented in the update), while highlighting acceleration in “New Category” revenue in the second half. ^[7]

In plain English: the company is telling investors it’s landing 2025 broadly as planned, with “smokeless” improving as the year progressed.

What spooked the stock: 2026 likely at the lower end of targets

The same update included a key line that markets don’t usually cheer: BAT expects 2026 revenue and profit growth to come in at the lower end of its mid-term ranges, citing pressure in the U.S. vape market and regulation/competition dynamics. Reuters reported the shares dropped sharply on the day as investors digested that message. ^[8]

BAT’s mid-term algorithm (the framework investors anchor on) is broadly:

Revenue growth:3%–5%
Adjusted profit from operations growth:4%–6%
(Plus an EPS growth framework the company references in its broader guidance communications)

But “lower end of the range” is a polite way of saying: don’t model a straight-line cruise to the optimistic case. ^[9]

The U.S. vape problem (and why enforcement is suddenly the plot twist)

If you want the single factor that keeps reappearing in BAT coverage, it’s this: illicit or unauthorized vaping products have been flooding the U.S. market, pressuring the sales base for authorized incumbents like BAT’s Vuse.

Reuters described the U.S. smoking alternatives market as roughly $22 billion, with a large share tied up in unregulated products—often attributed to imports. That’s been a direct headwind to the legal players’ volumes, pricing, and marketing freedom. ^[10]

Why BAT is cautiously optimistic: enforcement is finally showing up in the data

BAT explicitly pointed to “early signs” that federal and state enforcement actions targeting illicit vapor are supporting recent improvement in Vuse volume and revenue trends. ^[11]

That’s not just corporate spin—Reuters separately reported that BAT paused a pilot launch of an unlicensed U.S. disposable vape product (Vuse One) amid accelerating FDA enforcement against unauthorized vaping products. ^[12]

The underlying dynamic is important for the stock:

If enforcement is real and sustained, authorized brands can regain shelf space and market share, improving BAT’s “New Category” economics.
If enforcement fades or stays patchy, the U.S. vapor segment remains a margin and growth headache, reinforcing the “lower end” 2026 framing.

BAT investors are essentially underwriting a policy-and-enforcement storyline, not just a product roadmap. ^[13]

Capital returns: the £1.3bn buyback extension and what it signals

While growth guidance created nerves, BAT simultaneously leaned into what income and value investors love: buybacks.

The headline: up to £1.3bn for 2026

A London Stock Exchange RNS announcement (republished via FT Markets) detailed BAT’s plan to extend its share buyback programme by up to £1.3 billion for 2026, with shares repurchased intended to be cancelled (i.e., reducing share count). ^[14]

A notable mechanical detail: BAT entered an agreement with UBS for the next tranche, expected to run during the company’s closed period from Jan. 2, 2026 through Feb. 11, 2026 (the day before the full-year results release window referenced in the announcement). ^[15]

That matters for investors because it:

demonstrates confidence in cash generation, and
can provide technical support to the share price during a period when insider trading restrictions limit corporate flexibility.

Evidence the programme is active: published transaction reports

BAT also continues to publish detailed buyback transaction reporting. For example, its FCA buyback submission covering Dec. 8–12, 2025 shows daily share repurchases with disclosed volumes and weighted average prices (with execution handled by Goldman Sachs International in that document). ^[16]

The big-picture takeaway isn’t the day-to-day print—it’s that BAT is telegraphing: even while deleveraging and battling U.S. vapor disruption, we still intend to return substantial cash.

Deleveraging and portfolio cleanup: the ITC Hotels stake sale

BAT’s December wasn’t only about nicotine categories. It also pushed forward with balance sheet and portfolio moves.

On Dec. 5, 2025, BAT confirmed completion of a block trade selling 187.5 million shares in ITC Hotels—representing 9% of ITC Hotels’ issued ordinary share capital—raising net proceeds of INR 38.2 billion (about £315 million). BAT said the proceeds would support its push toward a 2.0–2.5x adjusted net debt/adjusted EBITDA leverage corridor (adjusted for Canada) by the end of 2026, while retaining roughly a 6.3% holding after the sale. ^[17]

Reuters also framed the sale as part of BAT’s effort to reduce debt and exit non-strategic investments. ^[18]

For the equity story, that’s relevant because it supports the idea that BAT can pursue a “two-track” strategy:

keep paying shareholders, and
keep improving leverage metrics—without relying solely on operating performance.

Dividends: key dates investors are watching into year-end

BAT remains a dividend-heavy stock story, and the calendar matters because many investors anchor their positioning around ex-dividend dates.

BAT’s official dividend schedule indicates quarterly payments of 60.06p per ordinary share, with relevant key dates including:

Record date:Dec. 30, 2025
Ex-dividend (LSE):Dec. 29, 2025
Ex-dividend (NYSE/ADS):Dec. 30, 2025
Payment date (LSE):Feb. 4, 2026
ADS payment date (NYSE):Feb. 9, 2026 ^[19]

With BATS around 4,236p, an annualized 240.24p dividend rate implies a yield in the mid‑5% range (back-of-the-envelope: ~5.7%), which helps explain why BAT often trades like a hybrid of “defensive consumer staple” and “financial asset with regulatory risk.” ^[20]

What analysts are forecasting for BAT stock now

Analyst coverage for BAT can look contradictory depending on the data provider—mostly because of different analyst universes and methodologies. The useful way to read forecasts is to focus on directional consensus and the range of outcomes the Street thinks is plausible.

London listing (BATS): modest upside in many base cases

One analyst-aggregation view tracking 19 analysts lists an average 12‑month target around 4,551.75p, implying roughly 6% upside from ~4,236p, with a very wide range (low to high). ^[21]

MarketBeat’s London-view dataset (based on a smaller pool) shows a similar magnitude of upside: an average target around 4,500p and a consensus leaning Hold (again: different sample size and normalization). ^[22]

U.S. ADR (BTI): targets cluster near the current price

For BTI, Investing.com’s displayed consensus shows an average target around $56.875 (close to the current ~$56.45), with a high/low range and an overall “Buy” label—but with mixed recommendations embedded beneath it. ^[23]

MarketBeat also highlighted a December note that Kepler Capital Markets initiated coverage with a Buy rating, while its broader snapshot leaned “Moderate Buy” with an average target price figure reported in that article. ^[24]

How to interpret that split

The simplest interpretation is: BAT is priced like a mature cash-return business, and analysts aren’t uniformly underwriting a dramatic rerating unless one of two things happens:

U.S. vapor normalizes (enforcement sticks, authorized brands regain momentum), pushing “New Categories” profitability higher, or
The market decides BAT’s cash returns deserve a higher multiple despite regulatory uncertainty.

Until then, many forecasts imply limited upside, with returns expected to come disproportionately from dividends + buybacks, not explosive share-price appreciation. ^[25]

The “sleeper” corporate update: board committee change

Not every December update moves a stock, but governance changes can matter at the margins—especially for large institutional holders.

BAT announced that Holly Keller Koeppel, a non-executive director, will step down from the Audit Committee effective Dec. 31, 2025, and it disclosed the updated committee composition. ^[26]

This isn’t a thesis-changer, but it’s part of the “current information set” investors consider when evaluating governance continuity.

Risks still hanging over BAT stock in 2026

BAT is not a “simple” dividend story, even if it sometimes trades like one. The risk stack is real—and it’s why the company can offer a higher yield than many consumer staples.

Key swing factors include:

Regulatory enforcement and authorization timelines (U.S.): FDA actions against unauthorized products can reshape competitive dynamics quickly. ^[27]
Competitive pressure in nicotine pouches: The FDA’s authorization of nicotine pouch products for competitors underscores that the category is becoming more formally regulated—and more competitively intense. ^[28]
Litigation complexity: While BAT has progressed on major Canadian litigation resolution steps, legal outcomes remain a structural risk in the sector (even when “resolved,” cash-flow mechanics and accounting can still matter). ^[29]
FX and macro sensitivity: BAT reports and trades across currencies; GBP and USD moves can affect investor returns even when underlying operations are stable. (This is a general market reality, but especially relevant for dual-listed/ADR-followed names.)

What to watch next: the near-term catalyst calendar

The next major “hard data” moment is BAT’s full-year results.

BAT’s investor calendar lists Full Year 2025 Results on Feb. 12, 2026. ^[30]

Between now and then, the market will likely stay focused on:

any incremental evidence that U.S. enforcement is improving legal vapor performance, ^[31]
the mechanics and pace of the buyback programme, ^[32]
and dividend positioning into the late‑December ex-dividend dates. ^[33]

Bottom line

As of Dec. 21, 2025, British American Tobacco stock is being priced as a high-cash-return incumbent navigating a messy transition. The company is supporting shareholders with an extended £1.3bn buyback and a defined dividend schedule, while acknowledging that 2026 growth is likely to land at the low end of its target ranges—largely because the U.S. vapor market remains distorted by unauthorized competition and shifting enforcement. ^[34]

For investors and observers, BAT’s near-term story is less about whether cigarettes generate cash (they still do), and more about whether “New Categories” can grow profitably in a regulatory environment that finally rewards compliance instead of punishing it.