Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  British American Tobacco Plc    BATS   GB0002875804

BRITISH AMERICAN TOBACCO PLC

(BATS)
  Report  
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

BAT warns of steeper declines in cigarette sales, shares slip

share with twitter share with LinkedIn share with facebook
share via e-mail
0
06/12/2019 | 08:52am EDT
A staff of British American Tobacco Japan demonstrates its new tobacco heating system device 'glo' after a news conference in Tokyo

(Reuters) - British American Tobacco (BAT), the world's No. 2 tobacco company, on Wednesday warned of steeper declines in cigarette sales globally mainly due to waning demand in its main U.S. market, sending its shares lower.

The warning highlighted the challenges dogging the tobacco industry as smokers, particularly in the United States, turn to less harmful alternatives such as e-cigarettes and vaping products.

The maker of Lucky Strike and Dunhill cigarettes said it expects global industry volumes to fall around 3.5% this year, compared with its earlier estimate of a 3% drop.

The stock, which had gained roughly one-fifth in value this year, lost almost 5 percent and sank to the bottom of Britain's blue-chip index, on course for its worst day in seven months.

"There is some profit taking, but the stock is still suffering from the wider changes in the industry," CMC Markets analyst David Madden said.

"The group will need to beef up its vape related sales in order to shake off the wider negative sentiment."

BAT said it would invest further in what it calls its "New Category" business and announced plans to consolidate the portfolio, which makes tobacco heating product glo and Vype e-cigarettes as well as snuff and nicotine pouches.

BAT said revenue growth in the "New Category" portfolio was approaching its annual guidance range, which analysts read as indicating some softness in that side of the business.


(graphic:

STATESIDE STRUGGLES

BAT expects volumes in the United States, which makes up for more than a third of its sales, to decline 4-5%, above the 3.5-4.5% range it estimated earlier.

Its guidance comes just a day after rival Imperial Brands, another tobacco firm looking to diversify with its blu e-cigarettes, reiterated its guidance of a 4.5%-5% decline in U.S. volumes for 2019.

Even Marlboro maker Philip Morris International Inc, the world's largest tobacco company, has flagged an industry-wide slowdown in cigarette volumes.

Credit Suisse analysts said BAT's forecast of a further decline in cigarette volume "is not a surprise given the year-to-date decline in the U.S. is over 5%, although (it) slightly questions management's 'feel' for the market."

Despite the challenges, BAT reaffirmed full-year targets.

BAT forecast sales of vaping and e-cigarette products to accelerate in the second half of the year.

However, its expectations that full-year revenue from the business would grow between 30% and 50% at constant currency was below Jefferies' estimate of 79% growth.

(Reporting by Shashwat Awasthi and Muvija M in Bengaluru, additional reporting by Helen Reid in London; Editing by Saumyadeb Chakrabarty and Edmund Blair)

By Shashwat Awasthi and Muvija M

Stocks mentioned in the article
ChangeLast1st jan.
BRITISH AMERICAN TOBACCO PLC -0.69% 2663.5 Delayed Quote.6.54%
IMPERIAL BRANDS PLC 1.34% 1863 Delayed Quote.-21.62%
PHILIP MORRIS INTERNATIONAL 0.88% 80.55 Delayed Quote.20.66%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on BRITISH AMERICAN TOBACCO P
10/18BRITISH AMERICAN TOBACCO : 2019 Annual General Meeting – Voting Results Up..
PU
10/16A selection of British stocks to play the Brexit game
10/11BRITISH AMERICAN TOBACCO : Reynolds American files for FDA review of e-cigarette
RE
10/11BRITISH AMERICAN TOBACCO&RS : uo;s U.S. subsidiary submits vapour Premarket Toba..
PU
10/11BRITISH AMERICAN TOBACCO : British American Tobacco's U.S. subsidiary submits va..
AQ
10/10MENTAL HEALTH FOCUS : Jo's journey
PU
10/06BRITISH AMERICAN TOBACCO : U.S. Food and Drug Administration vaping illness upda..
PU
10/03BRITISH AMERICAN TOBACCO : holds Recruitment Drive at LUMS - Press Release issue..
AQ
10/03LONDON STOCK EXCHANGE : FTSE 100 hits eight-month low as global slowdown fears t..
RE
10/03BRITISH AMERICAN TOBACCO : Notice of Redemption
PU
More news
Financials (GBP)
Sales 2019 25 919 M
EBIT 2019 11 144 M
Net income 2019 6 697 M
Debt 2019 43 018 M
Yield 2019 7,93%
P/E ratio 2019 8,93x
P/E ratio 2020 7,87x
EV / Sales2019 4,01x
EV / Sales2020 3,73x
Capitalization 60 895 M
Chart BRITISH AMERICAN TOBACCO PLC
Duration : Period :
British American Tobacco Plc Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends BRITISH AMERICAN TOBACCO P
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 3 568,77  GBp
Last Close Price 2 663,50  GBp
Spread / Highest target 84,0%
Spread / Average Target 34,0%
Spread / Lowest Target -18,0%
EPS Revisions
Managers
NameTitle
Jack Marie Henry David Bowles Chief Executive Officer & Executive Director
Richard George William Burrows Chairman
Alan Davy Director-Operations
Tadeu Luiz Marroco Executive Director & Finance Director
Marina Fagundes Bellini Director-Digital & Information
Sector and Competitors
1st jan.Capitalization (M$)
BRITISH AMERICAN TOBACCO PLC6.54%78 385
PHILIP MORRIS INTERNATIONAL20.66%125 323
ALTRIA GROUP-10.25%82 813
ITC LIMITED-12.71%42 614
JAPAN TOBACCO INC.-6.82%39 090
IMPERIAL BRANDS PLC-21.62%22 778