British American Tobacco (BTI) Buy, Sell or…

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British American Tobacco (BTI)

61.52

-0.28 (0.45%)

as of Jul 8, 2026, 7:34:00 pm Market Open.

95 watching

Investor Insights

Jul 7, 2026, 12:00 am

This summary was created by AI, based on 2 opinions in the last 12 months.

British American Tobacco (BTI-N) has experienced a significant run-up but faces long-term challenges concerning Environmental, Social, and Governance (ESG) factors. Despite a recent sell-off, the stock offers a sustainable dividend, prompting experts to suggest trimming holdings rather than liquidating entirely to preserve income. Recent earnings indicate organic revenue growth is aligning with management's low expectations, but operating profit guidance signals ongoing investment in their next-generation platform. As competition ramps up and consumer preferences shift, sustained R&D funding from their traditional cigarette profitability becomes crucial. The stock's valuation has increased from about 8X to 12X earnings, but a 72% one-year gain is seen as excessive, with expectations for Returns stabilizing in the near future; thus, taking some profits might be wise.

Consensus

Neutral

Valuation

Overvalued

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DON'T BUY

Pass. Doesn't care for tobacco stocks (or vape companies) given the harm they produce to human health.

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Curated by Michael O'Reilly since 2020.
1550+ opinions with 4.81 rating (one of the best performing expert).

TOP PICK

Stockchase Research Editor: Michael O'Reilly If you are okay owning tobacco based companies, BTI may be a good entry here. The England based company makes well known brands worldwide and trades at a 10x PE. Pandemic related stress is increasing consumption according to Reuters. The company pays a stellar dividend, backed by a payout ratio of only 26% of cash flow. We would trade this with a $32 stop-loss, looking to achieve a target of $50 -- 28% upside. Yield 7.1% (Analysts’ price target is $50.00)

DON'T BUY

The tobacco space looks cheap but there is a secular overhang. They are highly profitable but eventually, tobacco sales will disappear. ESG is also a force. Institutional investors may not be able to own this.

PAST TOP PICK

(A Top Pick Sep 06/19, Up 7%) Likes the sector. Opportunity now, as it's heavily oversold. Take a look at the category and add a second name.

BUY

Loaded up with debt, small dividend cut, vaping issue, new CEO, plus litigation. What are the underlying fundamentals moving forward? Asia seeing growth. Elsewhere, volumes going down but prices going up. It's a buy and there's some upside.

COMMENT

As a 7-year hold? Investors stay away from tobacco stocks because tobacco causes cancer. Yes, they have a lot of free cash flow and pay big dividends, but he doesn't see huge upside. You buy this for the dividend and a modest stock price rise over time.

BUY

They aren't a big player in the vaping industry. Vaping is more and more court regulated. Debt reduction will occur during 2020-2022. He doesn't see major challenges. He sees more growth and would buy looking at the chart and dividend. He also thinks that they might enter into cannabis and they would be well positioned.

TOP PICK

The long term dividend track record has been great. The recent issues around vaping and health concerns has caused the share price to drop. It acquired the Reynolds business in 2018 and it is doing well. It is very well valued here. Yield 7.55% (Analysts’ price target is $47.22)

BUY

They carry some debt. Pays a 6.6% dividend. It's underperformed in the past year, because they made a big US acquisition, and the FDA punished and targeted this sector until its bosses changed a few months ago. Ex-dividend, BTI generates $1.5 billion free cash flow, which will pay down debt aggressively. Has a good history of dividend growth. This may not climb immediately, but you can collected the dividend until then. He likes it.

BUY

There has been a sector rotation out of tobacco and staples into the high high-growth type stories. Good entry point.

DON'T BUY

This is the tobacco stock he *would* own if he owned any of them. This is a low-growth industry. There might be a catalyst for growth from heat-not-burn consumption of tobacco but he is looking to invest in companies with more growth opportunities in the fundamental business.

TOP PICK

The 15-year total return on the stock is 9.3X in Cdn$, which is 930%. This is currently on sale, because last year they purchased the remaining portion of Reynolds American that they didn’t own, giving them a bit more debt than normal. A very sticky business model. Dividend yield of 3.4%. (Analysts’ price target is $77.88.)

DON'T BUY

(Market Call Minute) He does not touch companies that addict their customers to deadly products.

COMMENT

He likes sin stocks and particularly likes tobacco. They give you dividend increases of substantial order. He particularly likes this which is effectively a Commonwealth story with the emerging markets. You don’t have much exposure with the US, and as a result, the risk of litigation is much lower. Good story and the dividend is attractive and grows slowly over time. Buy this on the dips, and you will be pretty happy.

BUY

British American Tobacco. Only held by his wife (non-smoker). Favorite tobacco company. Likes the global exposure and the growth possibilities. Would not be surprised to see them someday increase their exposure in the US.

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British American Tobacco (BTI)