British American Tobacco Stock (BATS.L, BTI): 2026 Guidance, £1.3bn Buyback, Dividend Dates and Analyst Forecasts (Dec 13, 2025)

British American Tobacco p.l.c. (BAT) stock heads into the weekend in focus after a busy week of company updates, broker notes, and fresh debate about the regulation that shapes the global nicotine market.

As of the last close (Friday, December 12, 2025), BAT shares on the London Stock Exchange (BATS.L) finished at 4,238p. ^[1] In the U.S., BAT’s American Depositary Receipt (BTI) last closed at $57.10. ^[2]

The headline driver is BAT’s FY25 pre-close trading update (published December 9), where the company said it remains on track for full-year delivery, but expects 2026 performance to land at the lower end of its mid-term growth range—primarily due to ongoing pressure in the U.S. vape market, where illicit products remain a major competitive force. ^[3]

Below is what investors are reacting to on December 13, 2025: the latest news, the company’s guidance, and the most current analyst forecasts and price targets.

British American Tobacco stock news this week: the big catalysts

1) BAT’s FY25 pre-close update: “on track,” but 2026 at the low end

In its December 9, 2025 trading update, BAT guided to roughly ~2% revenue growth and ~2% adjusted profit from operations growth for FY25 (at constant rates). ^[4]

The same update reaffirmed BAT’s mid-term algorithm from 2026—+3–5% revenue, +4–6% adjusted profit from operations, and +5–8% adjusted diluted EPS—but added a key qualifier: 2026 is expected toward the lower end of those ranges. ^[5]

Reuters reported BAT’s shares fell sharply after the update, with the company pointing to competition and regulation weighing on U.S. vaping even as it sees strong demand for its nicotine pouches. ^[6]

2) £1.3bn share buyback planned for FY26

BAT announced it is increasing its planned FY26 share buyback to £1.3 billion as part of its “balanced capital allocation” framework. ^[7]

Industry trade outlet Tobacco Reporter also said BAT entered an agreement with UBS to execute the next tranche, expected to run January 2 to February 11, 2026, with repurchased shares to be cancelled. ^[8]

3) Portfolio clean-up and deleveraging: ITC Hotels stake sale

BAT has also been working to simplify its holdings and reduce debt. After announcing plans to exit a “non‑strategic” stake in ITC Hotels in India, Reuters reported BAT intended to sell 7% to 15.3% via accelerated bookbuild, with leverage reduction as a key goal. ^[9]

BAT then confirmed completion of a 9% block trade in ITC Hotels (187.5 million shares), generating INR 38.2bn (about £315m) in net proceeds and leaving BAT with an approximate 6.3% holding. The company said proceeds would support progress toward its 2.0–2.5x adjusted net debt/EBITDA leverage corridor by end‑2026. ^[10]

4) Governance update: Audit Committee change

On December 12, BAT announced that non-executive director Holly Keller Koeppel will step down from the Audit Committee effective December 31, 2025. ^[11]

Governance items rarely move the stock on their own, but they matter for institutions watching board independence and oversight—especially in highly regulated sectors.

What BAT is forecasting for 2025 and 2026

FY25: modest growth, strong cash conversion, and FX headwinds

In its December 9 update, BAT provided “technical guidance” that frames how it expects to finish FY25, including:

Global tobacco industry volume expected to be down about ~2% in 2025
About ~2% group revenue growth (constant rates)
Mid-single-digit New Category revenue growth (constant rates)
Adjusted profit from operations growth of about ~2% (constant rates)
Net finance costs around ~£1.8bn (subject to FX/rate moves)
Operating cash flow conversion expected to be >95%
Gross capex around ~£650m ^[12]

Those numbers matter because the “BAT stock thesis” for many investors is still built on a familiar trio: pricing power in combustibles, cash conversion, and shareholder returns (dividends + buybacks).

2026: guidance intact, but management is “cautious”

The big message for 2026 is not that BAT changed the algorithm—it didn’t. It’s that management is setting expectations at the lower end.

Reuters summarized the reasoning: the U.S. market for smoking alternatives is being distorted by a large share of unregulated vape products (BAT estimated about 70% of the U.S. vape market is still unregulated), making it difficult for legal brands to grow as predictably as investors would like. ^[13]

BAT also flagged other 2026 challenges, including the impact of stricter tobacco regulation in Australia and the fact that investment behind new categories can weigh on near-term profit growth. ^[14]

The U.S. vape problem (and why enforcement is central to the BAT story)

BAT’s management is leaning heavily on a simple idea: the legal vape market can re-accelerate if regulators and law enforcement squeeze illicit supply.

In its pre-close update, BAT said it is seeing recent improvements in U.S. Vuse volume and revenue, and it explicitly linked those improvements to “early signs” of stronger federal and state enforcement actions against illicit vapour products. ^[15]

That enforcement theme has been building throughout 2025. Reuters previously reported that BAT paused a pilot launch of an unlicensed Vuse disposable in the U.S. after FDA action accelerated and scrutiny increased. ^[16]

From a regulatory standpoint, the U.S. Food and Drug Administration has also emphasized that it has issued 700+ warning letters to firms for unauthorized tobacco products (and 800+ to retailers), and that only a limited set of e-cigarette products are authorized for lawful sale. ^[17]

Put plainly: BAT is betting that enforcement will shrink the illegal market enough for legal leaders (like Vuse) to compete on more normal economic terms again.

New Categories growth: Velo, Vuse, glo Hilo, and Vuse Ultra

BAT’s “smoke-free transition” narrative is not new—but the latest update adds detail on where it sees momentum.

Velo (modern oral)

BAT highlighted strong performance for Velo, especially in the U.S., where it pointed to rapid growth for Velo Plus and said its New Category operations in the U.S. are on track for full-year profitability. ^[18]

Vuse (vapour)

BAT said Vuse remains a leader in tracked channels globally and expects FY revenue to be down “high single digit” (an improvement from the first half decline), while still acknowledging illicit headwinds in the U.S. and Canada. ^[19]

Heated products: glo Hilo

On heated tobacco, BAT said it is focused on establishing glo Hilo as a premium offering, citing launches in Japan, Poland and Italy in the second half, with further rollouts planned in 2026. ^[20]

“Premium” vapour: Vuse Ultra

BAT also called out early results for Vuse Ultra in Canada, Germany and France as part of its effort to build premium offerings where it sees “untapped” value. ^[21]

For investors, the key question is timing: how quickly can New Categories become a larger, more predictable engine—fast enough to offset declines in combustibles volumes and the regulatory drag on vapour?

Dividend update: next key dates for BAT shareholders

Dividend income remains one of BAT’s main attractions.

BAT’s dividend page shows that an interim dividend of 240.24p for the year ended December 31, 2024 is being paid in four equal quarterly instalments of 60.06p (May 2025, August 2025, November 2025, and February 2026). ^[22]

For the next instalment (the February 2026 payment), BAT lists these key dates:

LSE ex-dividend date:December 29, 2025
NYSE ex-dividend date:December 30, 2025
Record date:December 30, 2025
Payment date (LSE/JSE):February 4, 2026
ADS payment date (NYSE):February 9, 2026 ^[23]

At Friday’s London close of 4,238p, that 240.24p annualized dividend implies a forward yield of roughly 5.7% (simple annualized calculation using BAT’s published quarterly amount and the last close). ^[24]

Analyst forecasts and price targets: where sentiment is split

Broker views on British American Tobacco stock are mixed—but the mix is informative. It shows the market is still debating whether BAT is a cash-return compounder or a value trap with growing regulatory risk.

New coverage: Kepler Cheuvreux starts BAT at “Buy”

On December 12, Investing.com reported Kepler Cheuvreux initiated coverage with a Buy rating and a price target of £49.00 (4,900p), describing BAT as a preferred pick in the sector and pointing to high potential shareholder returns from dividend + buybacks + EPS growth. ^[25]

Jefferies: Buy, 5,200p target

Jefferies reiterated a Buy rating with a target price of 5,200p, according to a MarketScreener summary of its note (published December 10). ^[26]

RBC: Sell, 3,400p target (and a cautious tone)

RBC reiterated a Sell rating with a 3,400p target in a MarketScreener summary dated December 9. ^[27]

Separately, MarketScreener’s listing for a later RBC-related item indicates RBC revised its price target upward (to £36 from £34) while still flagging “midterm profitability headwinds” (the full article is paywalled, but the change in target and theme are visible in the headline/summary snippet). ^[28]

Panmure Liberum: “not expensive,” but limited room for upside surprises

In a market commentary carried by Proactive Investors, Panmure Liberum argued there may be limited scope for upside surprises, citing 2026 consensus earnings expectations around 362p and valuation around 12x estimated 2026 earnings with a yield near 5.8%. ^[29]

What this means in plain numbers (using the last London close of 4,238p):

Kepler’s 4,900p target implies roughly +15.6% upside
Jefferies’ 5,200p target implies roughly +22.7% upside
RBC’s 3,400p target implies roughly -19.8% downside ^[30]

That’s a wide dispersion for a FTSE 100 mega-cap—another sign that BAT’s next 12–18 months may hinge less on “steady state tobacco economics” and more on whether illicit vapour enforcement becomes meaningfully effective.

Regulatory and policy risks investors are tracking right now

Tobacco and nicotine stocks don’t trade in a normal consumer-goods universe. They trade inside a regulatory labyrinth that is always being rebuilt while you’re still holding the map.

Here are a few developments on the radar as of Dec 13:

EU transparency questions around tobacco-industry interactions

On December 10, Reuters reported campaign groups alleged some meetings between EU officials and tobacco industry representatives were not disclosed and said the findings reveal weaknesses in the EU’s transparency framework. BAT was among the companies mentioned in the report. ^[31]

This type of story doesn’t change near-term earnings by itself, but it can shape the politics around future rule-making—especially on heated tobacco, vapour, packaging, and taxation.

Global clampdowns on vaping

Reuters reported Mexico’s Senate approved reforms escalating penalties for the production or sale of vapes and e-cigarettes, with potential prison terms and significant fines. ^[32]

For multinationals like BAT, the important point is not just one country’s rules—it’s the pattern: regulation can tighten quickly, and enforcement can be uneven, which sometimes unintentionally benefits illicit trade.

Bottom line for British American Tobacco stock on Dec 13, 2025

British American Tobacco stock is being pulled by two opposing forces:

Cash and capital returns look very real: a high dividend, a newly announced £1.3bn FY26 buyback, and additional proceeds from divesting non-core holdings—paired with a clear deleveraging target. ^[33]
The U.S. vape market remains the swing factor: illicit competition is still large, and while enforcement may be improving at the margin, BAT itself is not yet confident enough to guide 2026 at the midpoint of its growth range. ^[34]

For investors, the near-term “watch list” is unusually concrete:

Evidence that illicit vape enforcement is translating into sustained legal-market growth
Whether New Categories profitability improves on schedule (especially in the U.S.)
Execution of the early‑2026 buyback tranche and continued leverage reduction ^[35]