London, June 8, 2026, 11:05 (BST)
British American Tobacco shares gained over 2% in London on Monday. The Lucky Strike maker was among the gainers in a down FTSE 100 after investors revisited the company’s U.S. vape and nicotine-pouch prospects following last week’s selloff.
Shares last traded at 4,499.5 pence, up 2.16%. That’s against the FTSE 100, which was off 0.27% in delayed figures from Hargreaves Lansdown. The stock closed at 4,404 pence previously.
BAT’s near-term story is back in the U.S. The company’s unit Reynolds American could see an edge from the Food and Drug Administration’s latest stance. The FDA now says it doesn’t plan to prioritize enforcement against some vapes and nicotine pouches without premarket approval, as long as those products have applications meeting certain criteria.
Big debut, but not straightforward. The FDA says a tobacco product usually needs written marketing approval to go on sale in the U.S., and this latest guidance isn’t a sign that a product will get full authorisation later.
BAT said June 2 that revenue from its “New Categories”—which includes Vuse vapes, Velo nicotine pouches and glo heated tobacco—is picking up speed. The company now sees mid-teens growth for these products in both the first half and all of 2026. Chief Executive Tadeu Marroco said: “In New Categories, revenue growth is accelerating and we now expect to deliver mid-teens for 2026.” BAT
Marroco said BAT supported the FDA’s prioritisation guidance, calling it “an important step toward effective enforcement and expanding market access for responsible products.” He said BAT is working on getting its Modern Oral and Vapour products ready. Modern oral covers nicotine pouches and other smokeless products. BAT
BAT kept its group outlook unchanged. Reuters said last week shares dropped 4% after BAT stuck to full-year revenue and adjusted operating profit guidance at the low end of its range.
Barclays analyst Pallav Mittal said some investors were looking for at least a revenue guidance bump, but added BAT is playing it safe with the Iran war’s impacts still murky, Reuters reported. Marroco told analysts the unlicensed U.S. vape market is around 7 billion pounds. “The size of the prize is very high,” he said. Reuters
The competition isn’t only commercial—politics is heavily in the mix. Six Democratic senators, among them Dick Durbin and Elizabeth Warren, sent public letters to both Reynolds American and Altria questioning their donations and lobbying around the FDA policy change. Altria stands out as a main U.S. competitor in both tobacco and smoke-free categories. Reynolds has not replied to Reuters requests for comment.
BAT’s legacy cigarette division isn’t helping much. The company reported group value share in main cigarette markets slipped 20 basis points, with volume share down 30 basis points. A basis point equals one-hundredth of a percentage point. BAT now sees global cigarette industry volume dropping around 2.5% this year. Its last forecast was about 2%.
Tobacco shares caught a bid on Monday as defensive buyers moved in while markets stayed nervous. London stocks started lower, with oil prices up after Israel and Iran traded strikes. Hargreaves Lansdown data later showed the FTSE 100 still down, but BAT in the gainers.
Some investors are counting on a boost from U.S. vape, but there’s a risk it could fall short or take longer. BAT has flagged the Middle East, saying higher fuel and essentials could hit consumer sentiment. Scrutiny from U.S. senators on tobacco lobbying adds a layer of regulatory pressure as BAT moves to launch flavoured Vuse and a new Velo pouch.
BAT shares bounced on Monday, signaling investors are ready to look again after the letdown last week. Expectations are still high. Now the company has to use the more open U.S. policy to drive sales, but it can’t let its cigarette business slip further or get caught if the FDA policy change hits political gridlock.
