British American Tobacco p.l.c.BTI
NYSE • Consumer Defensive
$65.35
P/E
13.47
PEG
0.11
FCF Yield
—
Rev Growth YoY
-2.2% YoY
Gross Margin
83.4%
Health Score
8/10
D/E Ratio
0.73
Confidence
MEDIUM
Business Snapshot
British American Tobacco is a global tobacco company operating in the consumer defensive sector, generating revenue from combustible cigarettes and reduced-risk products such as vaping and heated tobacco. It holds a dominant competitive position in an industry characterised by high regulatory barriers, consistent demand, and significant pricing power. With trailing twelve-month revenue of $51.48 billion, it qualifies as a large-cap company. A defining characteristic is its ability to sustain high gross margins (83.4%), reflecting excise-tax pass-through and brand strength, even as volumes face structural decline.
Financial Health
Gross margin stands at 83.4%, a slight deterioration from 83.6% in the prior year, while net margin of 30.3% remains robust, demonstrating solid cost control. Debt/equity of 0.73x is manageable and well below the threshold for concern, though the current ratio of 0.87x points to some short-term liquidity tightness...
Risk Assessment
- REVENUE DECELERATION — Revenue declined 2.2% year-over-year, while the 12.2% sequential gain provides only a partial offset; the long-term trend is contracting.
- LIQUIDITY — Current ratio of 0.87x is below the 1.0x threshold, indicating potential short-term liquidity constraints.
- 52-WEEK POSITION — The current price of $65.35 is just $0.12 below the 52-week high of $65.47, leaving limited recent upside and suggesting resistance near current levels.
- EARNINGS QUALITY — Only 2 of the last 4 quarters beat estimates, and a net loss of $1.42 billion in Q3 2024-12 distorts year-over-year earnings growth to 117.7%, reducing the credibility of that growth figure.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
- VALUATION DIVERGENCE — FMP DCF of $200.05 suggests deep undervaluation but the Python DCF could not be calculated (unavailable free cash flow), creating uncertainty around the intrinsic value estimate....