London, June 12, 2026, 12:03 BST
- British American Tobacco’s London stock traded at about 4,565p/4,567p after slipping a bit on Friday. The FTSE 100 gained.
- BAT is leaning on cash returns, with a dividend yield over 5% and a £1.3 billion buyback planned for 2026.
- The big test comes July 30, when the Half-Year Report 2026 lands. Investors will look to see if gains at Vuse and Velo are enough to balance out the hit from cigarette weakness.
British American Tobacco p.l.c. fell in London on Friday, with Hargreaves Lansdown showing a sell price of 4,565p and a buy price of 4,567p, off 18p, or 0.39%. The FTSE 100 gained 1.14%. BAT had only just picked up some ground this week, including a 2.03% jump to £45.66 on Wednesday. Investors remain split on whether the stock’s income case stacks up against slowing cigarette volumes and steady full-year guidance.
BAT’s pre-close update on June 2 has kept the share in play. The company now sees “New Category” revenue—which covers vapour, heated tobacco, and oral nicotine—growing at a mid-teens rate for both the first half and the full year. But BAT left 2026 group revenue guidance at the low end of its 3%–5% target, and adjusted profit from operations at the bottom of its 4%–6% range. CEO Tadeu Marroco said the “full-year delivery remains firmly on track.” BAT
BAT’s stock is reacting unevenly as investors weigh clearer signs for the bull case compared to last year. Velo is picking up share in modern oral nicotine. Vuse has shown better U.S. momentum, and BAT says it’s still seeing strong cash generation. In its latest update, the company said Velo’s volume share was up 5.7 percentage points in total oral and up 7.4 points in modern oral across key markets. Vuse’s global value share in top markets climbed 1.3 points. Those gains in non-cigarette products could turn into a higher valuation if the market thinks BAT can keep profits steady while cigarette sales decline.
BAT shares slipped 4% after the June 2 update, Reuters said, as investors didn’t get a bump in group guidance—even though the company lifted its outlook for smoking alternatives. Reuters also pointed out BAT is losing cigarette market share in key tobacco markets and is forecasting a 2.5% drop in global cigarette industry volumes this year. Barclays analyst Pallav Mittal said some investors were looking for an upgrade after the U.S. FDA changed tack on certain illegal vape products. On a call, Marroco told analysts, “The size of the prize is very high,” referencing BAT’s £7 billion U.S. illicit vape market projection. Reuters
BAT is still drawing income investors who want cash. The company says it’s looking for operating cash flow conversion above 95% in 2026, so nearly all operating profit shows up as cash. BAT is also aiming for adjusted net debt to adjusted EBITDA between 2.0 and 2.5 times by the end of the year. Leverage is a standard metric for balance-sheet risk. The board kept its guidance for a progressive dividend and said buybacks will remain “sustainable,” with £1.3 billion set for 2026. The buyback plan will cancel shares bought back and cut the share count. BAT
BAT’s next big event is its Half-Year Report 2026, set for Thursday, July 30. Investors want to see if growth in Vuse and Velo is starting to show up in overall revenue and adjusted profit, instead of just filling the gap left by weaker cigarette sales. The report also needs to show if APMEA — Asia Pacific, Middle East and Africa — is finding its footing, if U.S. gains have staying power, and if cash flow is still solid enough to support dividends and buybacks.
BAT shares, around Friday’s quoted price, trade at levels that look fair to maybe slightly attractive if you’re chasing income, but it’s tougher to call them a safe bet for growth. Hargreaves Lansdown data puts the group’s market cap at about £98.67 billion, with a price-to-earnings ratio of 12.95 and a 5.26% dividend yield; price-to-earnings is the share price divided by annual earnings per share. Even so, risks remain: BAT is running with lower-end guidance, cigarette volumes are falling, and there’s still regulatory noise, illicit vapes, and possible macro-driven pressure on customers.
