This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Shares found support after a 13% selloff. The sell-off was derived from a revival of GBP strength, something which has since begun to reverse. The tobacco sector is regarded as non-cyclical and defensive, less sensitive to economic ups and downs. Innovation in e-cigarettes contributing more and more. Attractive 5.8% dividend.
Risks to British American Tobacco shares include poor FY results in November; FX headwinds from strengthening GBP; a sustained market rally that creates a preference for riskier stocks (e.g. Banks, Financials, Miners) and lower than expected adoption of e-cigarettes and new tobacco products.
Brokers/analysts are bullish on the shares with only 9% suggesting Sell. This is supported by 84% of broker price targets suggesting upside from current levels, to a consensus target of 4755p, well beyond our target of revisiting the 5-month trendline of falling highs resistance at 4200p.
Next Event: Preliminary full year results, 6 Nov
Latest Broker 12-Month Consensus: 77% Buy, 14% Hold, 9% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr | |
| Perf % | -4.1 | -10.5 | -2.0 | -11.2 | -22.1 | -23.0 | 8.7 | 5.1 | 14.9 |
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Prepared by Michael van Dulken, Head of Research