British American Tobacco PLC
British American Tobacco PLC (NYSE: BTI) is a British multinational corporation that produces and sells cigarettes, tobacco, and other nicotine-containing products. Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans Neo, Vuse, Newport, Camel, and Natural American Spirit are among the company's leading brands. BTI has 2.29 billion American Depository Shares (ADS) listed and outstanding (each ADS representing one ordinary shares).
Why should Investors Book Profits?
Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation
(Analysis by Kalkine Group)
* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
BTI's share price has surged 31.80% in the past three months and is currently leaning towards the higher end of its 52-week range of USD 33.62 to USD 47.24. We have valued the stock using the EV/EBITDA multiple-based relative valuation methodology and arrived at a target price of USD 40.16.
Considering the significant rise in the share price in a short span, long cash conversion cycle, the decline in sticks equivalent, and other induced regulatory risks in the business, we recommend a "Sell" rating on the stock at the closing price of USD 45.18, up 3.46% as of February 25, 2022.
Three-Year Technical Price Chart (as of February 25, 2022). Source: REFINITIV, Analysis by Kalkine Group
*All forecasted figures and Industry Information have been taken from REFINITIV.
*The reference data in this report has been partly sourced from REFINITIV.