London, May 13, 2026, 09:14 BST
- BAT’s shares in London added 1.72% to GBX 4,713.78 in early Wednesday trading, following Tuesday’s sharp 5.82% climb.
- This shift follows fresh FDA guidance, which reduces short-term enforcement risk for certain e-cigarette and nicotine pouch products that still have applications under review.
- Bulls are betting Vuse and Velo have a more straightforward route ahead. Bears, though, argue this is just a pause—not the ultimate U.S. green light.
British American Tobacco moved higher in London Wednesday, building on a strong surge that set it apart during Tuesday’s sluggish trading. Shares traded at GBX 4,713.78 according to Google Finance, a 1.72% gain and close to the upper end of the morning’s moves—just shy of the 52-week peak at GBX 4,876.92.
Investors reacted after U.S. regulators offered more clarity. The FDA’s latest enforcement guidance signals it won’t be targeting some e-cigarette and oral nicotine pouch products that haven’t secured final authorization yet, as long as their premarket applications are still pending. Those applications—required before companies can legally introduce new tobacco products—remain under review.
This is a bigger deal for BAT than for a traditional cigarette maker. The company’s pitch to investors centers on growth from Vuse (vapour) and Velo (nicotine pouches), while the legacy cigarette side keeps generating cash, but no one expects volumes to really move much there. Back in February, BAT pointed to “triple-digit revenue growth” for Velo Plus, adding that Vuse should be “well positioned to benefit from stronger enforcement” down the line. BAT
This rally extended beyond just one name. According to Investing.com, Philip Morris and Altria also saw shares move after the FDA guidance dropped; they’re the main U.S.-listed competitors here—Philip Morris owns Zyn, Altria pushes On!, and both go head-to-head with Velo in the pouch space.
The peer signals aren’t all positive. On Tuesday, Imperial Brands—BAT’s top U.K. rival—flagged the risk of higher energy and logistics expenses if the Iran conflict drags on. Reuters reported Imperial gave up 16 basis points of share in its main markets as it leaned into profitability, backing off volume. The takeaway: tobacco’s got pricing power, but it has limits.
BAT caught a legal break after a U.S. judge tossed the criminal case related to North Korea sanctions, following the company’s completion of a three-year deferred prosecution agreement and payment of roughly $630 million in penalties and forfeiture. The Vuse and Velo businesses aren’t affected, but the dismissal clears out a longstanding risk from BAT’s books.
The core argument for bulls hinges on regulatory clarity. Should the FDA continue its shift toward a steadier review and enforcement framework, BAT stands to benefit by steering U.S. demand away from grey-market and illicit products toward its branded offerings. On the February call, Chief Executive Tadeu Marroco described himself as “extremely encouraged” about Velo’s U.S. trajectory, adding there’s still “plenty of opportunity” for further expansion. Reuters
The bear argument actually kicks off right there. The FDA’s guidance isn’t the same as a green light, and the Federal Register makes it clear: any new tobacco products lacking premarket authorization are still being sold illegally. Public-health advocates aren’t letting it slide—Campaign for Tobacco-Free Kids, for one, claims the policy just hands major tobacco players a way to keep their products on shelves without full vetting.
Youth use remains a sticking point. The American Dental Association, alongside other organizations, pushed the FDA to toughen its stance on flavored e-cigarette applications, warning that looser rules could erode safeguards for young people. Political pressure isn’t going anywhere, despite the market reading today’s moves as a positive.
BAT isn’t letting expectations run wild. Back in February, the company stuck to its 2026 constant-currency goals, but only at the low end: revenue growth targets set between 3% and 5%, adjusted operating profit looking for 4% to 6%, and adjusted diluted EPS climbing just 5% to 8%. (That’s earnings per share, the profit figure split by number of shares.)
The stock’s jump isn’t about a sudden shift into high-octane growth mode. What’s actually in play: regulatory overhang has eased off, and with buybacks, dividends, and some U.S. non-combustible momentum, investors are suddenly willing to pay up for the cash flow. Google Finance, early Wednesday, had the dividend yield at 5.15% and the price-to-earnings ratio at 13.35.
At this point, BAT shares aren’t really tracking cigarette volumes—they’re behaving more like a play on how U.S. regulators handle nicotine alternatives. The real challenge ahead: Can Vuse and Velo capitalize on the current window of lighter enforcement, locking in authorized and profitable sales before public-health concerns or a sluggish FDA clamp that door shut again?
