British American Tobacco p.l.c. (BAT) is closing out 2025 in far better shape than it started the year. The London-listed shares (LON: BATS) and New York–listed American Depositary Receipts (NYSE: BTI) are trading near 52‑week – and in some cases multi‑year – highs, powered by a combination of hefty dividends, aggressive share buybacks and a gradual improvement in underlying earnings. [1]
At the same time, the investment case is more nuanced than a simple “yield play”. Regulatory risk, the long shadow of litigation and questions over how much growth is really left in tobacco are all back on the table as 2026 approaches. [2]
This article rounds up the latest news, forecasts and analysis on British American Tobacco stock as of 2 December 2025, focusing on both the UK listing (BATS) and the US ADR (BTI).
Where British American Tobacco’s share price stands now
BATS in London: near eight‑year highs
On the London Stock Exchange, British American Tobacco shares have recently been trading around 4,400p, close to a 52‑week high of roughly 4,408p, and far above a 52‑week low near 2,838p earlier in the year. [3]
Data from TradingEconomics and other market trackers suggest the stock has gained roughly 45–50% over the past 12 months, putting it among the better performing large‑cap “defensive” names in the FTSE 100. [4]
Several recent news stories have explicitly highlighted that BATS is trading around its highest levels in years, with financial media noting that the share price is hovering close to multi‑year or near‑record highs as analyst upgrades and buybacks have supported sentiment. TS2 Tech+2TS2 Tech+2
BTI in New York: testing resistance
In New York, BTI closed at $58.13 on Monday 1 December 2025, down 0.9% on the day but still very close to the top of its 12‑month range of roughly $34.82–$59.29. [5]
Short‑term technical analysis from StockInvest classifies BTI as a “buy candidate” since late November:
- The stock has risen in seven of the last ten sessions and is up about 7% over the past two weeks.
- It sits at the upper end of a wide horizontal trend; resistance is flagged around $58.66, with support zones near $55.08 and $52.35.
- For 2 December, the site expected a “fair” opening price around $58.29 and projected an intraday range of roughly $57.68–$58.58 based on recent volatility. [6]
In other words, the market has already priced in a lot of optimism – which matters for how we read the latest forecasts.
2025 in context: from Canadian litigation shock to recovery
The Canadian settlement overhang
The current strength in BAT’s share price is striking given where the company started the year. In early 2025 BAT booked a £6.2 billion provision related to a proposed C$32.5 billion settlement of long‑running Canadian tobacco litigation, covering claims against BAT, Philip Morris International and Japan Tobacco. [7]
Key points from that episode:
- The provision, tied to a plan that would see 85% of Canadian net profits used to fund settlement payments, triggered a single‑day share price drop of around 8–10%. [8]
- BAT said the settlement would remove a major legal uncertainty while reiterating only around 1% expected revenue growth in 2025, with 1.5–2.5% operating profit growth, reflecting tough markets and litigation costs. [9]
Over the course of 2025, BAT has provided further updates as Canadian courts have moved to sanction plans of compromise and arrangement under Canada’s restructuring regime, gradually reducing tail‑risk but not eliminating legal uncertainty entirely. [10]
ITC stake sale and financial flexibility
A second major strategic move was BAT’s decision to trim its stake in Indian conglomerate ITC Ltd:
- In May 2025, BAT sold roughly 2.3–2.5% of ITC’s share capital through a block trade worth about ₹129.4bn (around $1.5bn). [11]
- The sale cut BAT’s ITC holding to roughly 23%, but left it as ITC’s largest shareholder. [12]
- BAT explicitly linked the transaction to greater “financial flexibility”, and at the half‑year it said the deal allowed it to add £200m to its 2025 share buyback, taking the planned buyback total to £1.1bn. [13]
Together with strong cash generation, this has supported the company’s ability to keep rewarding shareholders despite the heavy Canadian provision.
Half‑year 2025 results: slow growth, better mix
BAT’s half‑year report to 30 June 2025 painted a picture of modest growth and improving mix: [14]
- Revenue: down 2.2% reported, but up 1.8% at constant currency, helped by a return to growth in the U.S. and continued strength in the Americas & Europe (AME), partly offset by regulatory and tax headwinds in Asia‑Pacific & Middle East (APMEA).
- New Categories (vapour, heated tobacco and oral nicotine) revenue was £1.65bn, roughly flat reported but up 2.4% at constant FX.
- Smokeless products now account for 18.2% of group revenue, up 70 basis points versus FY 2024.
- New Categories contribution margin rose to 10.6%, up 2.8 percentage points at constant FX.
- Reported profit from operations jumped 19.1%, largely because the updated Canadian settlement provision produced a net credit versus large impairment charges in the prior year.
- On an adjusted, constant‑currency basis (also adjusting for Canada), profit from operations rose 1.9%, with an adjusted operating margin of around 43%.
Chief executive Tadeu Marroco repeated the line that 2025 is a “deployment year”, with investment in new products and markets, and emphasised a goal of returning to BAT’s “mid‑term algorithm” of faster growth in 2026. [15]
Buybacks and dividends: capital‑return engine in high gear
Share buyback programme: £1.1bn for 2025 and counting
Capital return has been a central theme of BAT’s 2025 story.
- In its full‑year 2024 communication, BAT outlined a £900m share buyback for 2025 alongside its dividend, despite the Canada provision. [16]
- After the ITC stake sale, the half‑year results confirmed that the 2025 buyback programme had been increased to £1.1bn. [17]
- BAT has been reporting almost daily “Transaction in Own Shares” notices, reflecting steady purchases of its own stock in the open market. [18]
On 2 December 2025, TipRanks’ auto‑generated newswire reported that BAT bought 115,000 of its ordinary shares via Goldman Sachs International under this programme, with the intention that they will be cancelled, reducing the share count and modestly boosting earnings per share. [19]
A separate TipRanks announcement in late November highlighted the launch of the buyback programme with Goldman Sachs, confirming that the goal is to reduce share capital rather than simply recycling shares into employee schemes. [20]
TipRanks’ AI “Spark” model currently tags BATS as a neutral overall, noting strong technical momentum and positive earnings‑call sentiment around smokeless products but also flagging concerns over earnings volatility and a high reported P/E ratio. [21]
Dividends: high yield, quarterly cadence
BAT remains a classic income stock:
- On the London line, the company’s investor relations site shows a quarterly dividend of around 60p per share for 2025, implying roughly 240p per share for the year. Based on recent prices, that equates to a forward dividend yield in the mid‑5% to mid‑6% range. [22]
- On the BTI ADR, sites such as StockInvest and TipRanks list quarterly dividends of $0.749 per ADS, with the next ex‑dividend date on 30 December 2025 and payment scheduled for early February 2026. [23]
- TipRanks currently puts BTI’s annual dividend yield a little above 5%, higher than the average yield for the tobacco industry. [24]
Combine that with the buyback programme and investors are effectively looking at a total shareholder yield in the high single digits, even before any future share‑price moves are considered. [25]
Fundamentals: a slow‑growing giant trying to go smokeless
New Categories vs combustibles
BAT’s long‑term strategy is to gradually shift revenue and profits toward “smokeless” products while squeezing as much value as possible from its traditional cigarette portfolio.
From company reporting and coverage by the Financial Times: [26]
- Global cigarette volumes are expected to decline by about 2% in 2025, continuing a multi‑year downtrend.
- BAT relies on price/mix – raising prices and tilting toward premium brands – to offset falling volumes in combustibles.
- New products such as Vuse vapes, glo heated tobacco and Velo nicotine pouches are growing faster. Nicotine pouches in particular carry higher gross margins (around 75%) than cigarettes (around 60%), making them attractive to management.
- Even so, smokeless products accounted for only the high‑teens percentage of revenue in 2024/2025, versus roughly 39% of revenue at rival Philip Morris International, underlining that BAT is still earlier in its transition.
The half‑year 2025 numbers underscore this tension: smokeless revenue is growing and becoming more profitable, but the segment is not yet big enough to fully dominate the group’s financials. [27]
Regional dynamics: U.S. recovery, APMEA headwinds
Regionally, 2025 has been a mixed bag: [28]
- In the United States, BAT returned to revenue and profit growth for the first time since 2022, helped by improved share in combustibles and strong uptake of Velo oral nicotine.
- The Americas & Europe (AME) region continued to perform well thanks to price/mix in cigarettes and growth of modern oral products.
- Asia-Pacific & Middle East (APMEA) faced significant tax and regulatory headwinds, particularly in Bangladesh and Australia, which more than offset growth in markets such as Pakistan, Nigeria and Indonesia.
Management has framed 2025 as an investment phase for innovation and geographic expansion in smokeless products, with a view to unlocking stronger, more balanced growth from 2026 onward. [29]
Valuation and forecasts: is BAT still cheap?
P/E, P/S and EV/EBITDA: no longer bargain‑basement
On headline metrics, BTI no longer looks like the deep value play it appeared to be when sentiment around tobacco bottomed out:
- Yahoo Finance currently lists a trailing P/E ratio of around 31.8 and a forward P/E of roughly 12.3 for BTI, reflecting the huge Canadian provision in trailing earnings and expectations of a rebound in adjusted EPS. [30]
- Intellectia’s valuation dashboard suggests BTI’s forward price‑to‑sales ratio is about 3.7, versus a five‑year average of 2.47, categorising the stock as “strongly overvalued” on that metric. Its forward EV/EBITDA multiple of around 10.1 also screens as richer than the 5‑year average near 8.0. [31]
So while forward earnings multiples are still below many consumer‑staples peers, BAT is no longer trading on the rock‑bottom valuations of 2023–early 2024.
Analyst targets: mixed signals
Analyst and AI‑driven forecast services offer a split verdict as of 2 December 2025.
MarketBeat (10 Wall Street analysts) [32]
- Consensus rating: Moderate Buy (7 Buy, 1 Hold, 2 Sell).
- Average 12‑month price target: $51.00, implying about 12% downside from the current $58 area.
- Target range: $40–$62.
MarketBeat’s commentary highlights the regulatory overhang, the structurally declining nature of cigarette volumes and the fact that some brokers see limited upside now that the stock trades near its 12‑month high.
Fintel / Nasdaq (Deutsche Bank reiteration) [33]
A recent Fintel note relayed via Nasdaq reported that Deutsche Bank reiterated a Buy rating on BTI on 28 November 2025, citing:
- An average one‑year price target of $59.49 across its covered analysts, representing about 1–2% upside from a then‑price of $58.66.
- A wide span of targets between $40.28 and $72.58, underlining how divided the Street remains.
Intellectia & Argus [34]
On Intellectia’s BTI page:
- The average 12‑month price target is shown as $62, based on a single active analyst, implying mid‑single‑digit upside from around $58.
- Argus upgraded BTI from Hold to Buy in September 2025 with a $62 price target, arguing that BAT’s pivot toward smokeless products – particularly Velo in the U.S. – is working, that the dividend (quoted around 6.5% at the time) is attractive and that the shares had resumed a “bullish” trading pattern.
Recent broker moves on BATS (London line) [35]
Intellectia’s log of broker actions for BATS highlights:
- Deutsche Bank raising its sterling price target to 4,900p and keeping a Buy rating.
- Citigroup lifting its target to 4,850p and also rating the shares Buy.
- Argus upgrading to Buy on the U.S. line with the same $62 target.
- On the cautious side, RBC Capital downgraded BAT to Underperform, arguing that profit expectations for reduced‑risk products are “seriously overblown”, while Morgan Stanley maintains an Underweight with a $40 target, suggesting that the year‑to‑date rally largely prices in flawless execution.
AI and technical models
Beyond human analysts, several AI and rules‑based services provide short‑term views:
- StockInvest’s model sees BTI as a short‑term buy candidate, but warns that the stock is near the top of its horizontal trend band and close to volume resistance at $58.66, meaning the near‑term reward‑to‑risk on new positions is not especially favourable. It estimates a 90% probability that BTI trades between about $50.75 and $58.94 over the next three months. [36]
- TipRanks’ AI Spark rates BATS as Neutral, acknowledging strong technical momentum and smokeless growth but cautioning about earnings volatility and the high trailing P/E multiple. 0
In short: quantitative tools mostly agree that momentum is positive, but some are signalling that the easy re‑rating phase may be behind us.
Sector backdrop: lower rates and the tobacco “income trade”
One reason BAT has rerated sharply in 2025 is macro rather than company‑specific.
A recent TipRanks article framed BTI, Philip Morris (PM) and Universal Corp (UVV) as high‑yield beneficiaries of a shift toward lower interest rates, arguing that:
- Investor mood around tobacco has “quietly yet strongly” improved as concerns about ESG exclusions have eased at the margin.
- Robust cash generation, resilient pricing in combustibles and the growth of heated tobacco and oral nicotine mean earnings have held up better than might be expected from volume trends.
- In an environment where bond yields are drifting lower from their peaks, tobacco stocks’ 5–7% dividend yields have become relatively more attractive again.
BAT is almost the textbook example of this thesis: a mature, cash‑rich business with limited organic growth but a very visible stream of dividends and buybacks.
Key risks going into 2026
Even with the recent rally, the bear case has not disappeared. Major risks highlighted by company disclosures and independent analysis include:
- Structural decline in combustibles
Global cigarette volumes are expected to keep falling by around 2% a year or more. BAT’s strategy of offsetting this with price/mix and smokeless growth works until regulators or consumer preferences change in ways that blunt both levers. - Regulatory and tax shocks
- Potential flavour bans and nicotine caps in key markets.
- Tougher excise regimes in places such as Bangladesh, Australia and Malaysia.
- Ongoing debates in the UK over “smoke‑free generation” legislation and in the U.S. over menthol bans and vaping rules.
All of these can disrupt volumes, margins or the viability of certain product formats.
- Illicit and unregulated competition
BAT has repeatedly complained that unapproved disposable vapes are undercutting regulated products and eroding market share, particularly in North America and parts of Europe. If enforcement remains patchy, legal operators may find themselves competing on uneven terms. - Litigation overhang
The Canadian settlement plan is a big step toward resolving a major risk, but tobacco litigation rarely goes away entirely. New cases or adverse rulings elsewhere could trigger fresh provisions. - Execution risk in New Categories
The whole transition story depends on BAT scaling smokeless products with acceptable margins. That assumes continued consumer acceptance, supportive regulation and successful product launches – none of which are guaranteed. - Valuation and positioning risk
After a rally that has left BTI and BATS near 52‑week highs, some analysts – notably RBC and Morgan Stanley – argue that expectations for smokeless profit growth and capital returns may now be too optimistic, especially if macro conditions or regulation unexpectedly tighten.
What to watch next
Looking beyond 2 December 2025, several catalysts and data points are likely to shape the next leg for British American Tobacco stock:
- December 2025 pre‑close trading update
BAT has signalled that it will provide a trading update later in December, focusing on full‑year 2025 performance and progress toward its 2026 growth goals. Investors will scrutinise:- Whether New Categories growth and margins are accelerating as promised.
- Any changes to the £1.1bn buyback pace or hints about 2026 capital returns.
- Management’s tone on regulatory and tax developments.
- FY 2025 results and 2026 guidance (early 2026)
The next full results will give a clearer picture of how much of the 2025 rebound is structural versus one‑off (currency, Canada). - Canadian settlement milestones
Any further court approvals or clarifications around the C$32.5bn settlement could move perceptions of long‑term legal risk, especially if they alter the expected cash outflow profile. - CFO succession and board changes
BAT has already announced that CFO Soraya Benchikh is stepping down, with the search for a permanent successor underway. The choice of CFO – and broader board reshuffles – will be read as signals about risk appetite and capital‑allocation philosophy. - Dividend decisions and ex‑dividend dates
The next ex‑dividend on BTI is scheduled for 30 December 2025, with a $0.749 payout. The company’s stance on future dividend growth, following years of high but more modest increases, will matter for income‑focused holders.
Bottom line: high‑yield blue chip, with risks now priced in
As of 2 December 2025, British American Tobacco stock presents a familiar but evolved proposition:
- A high dividend yield and large buyback underpin a robust shareholder‑return story.
- Underlying operations are grinding forward, with smokeless products slowly taking a larger share of revenue and the U.S. business back to profit growth.
- The share price has already re‑rated sharply from the lows around the time of the Canadian provision, and valuation metrics now sit above their own historical averages on several measures.
- Analysts and models are split: plenty of Buy ratings and AI buy signals, but also some prominent Underperform calls and consensus targets that sit below the current price.
For investors tracking BTI and BATS via Google News and Discover, the takeaway on 2 December 2025 is that BAT has transitioned from a distressed, litigation‑clouded value trap into a more normal high‑yield consumer‑staples stock – one that may still offer attractive income, but where future returns will increasingly depend on execution in smokeless products and the whims of regulators, rather than a simple re‑rating from ultra‑cheap levels.
References
1. tradingeconomics.com, 2. www.ft.com, 3. tradingeconomics.com, 4. tradingeconomics.com, 5. stockinvest.us, 6. stockinvest.us, 7. www.ft.com, 8. www.ft.com, 9. www.ft.com, 10. www.bat.com, 11. www.reuters.com, 12. www.reuters.com, 13. www.bat.com, 14. www.bat.com, 15. www.ft.com, 16. www.ft.com, 17. www.bat.com, 18. www.bat.com, 19. www.tipranks.com, 20. www.tipranks.com, 21. www.tipranks.com, 22. www.bat.com, 23. stockinvest.us, 24. www.tipranks.com, 25. stockinvest.us, 26. www.ft.com, 27. www.bat.com, 28. www.ft.com, 29. www.ft.com, 30. finance.yahoo.com, 31. intellectia.ai, 32. www.marketbeat.com, 33. www.nasdaq.com, 34. stockanalysis.com, 35. intellectia.ai, 36. stockinvest.us
