BofA: British American Tobacco Capital Markets Day Yields 'Limited Implications' for Consensus

01:37 AM EDT, 10/02/2026 (MT Newswires) -- BofA Global Research expects "limited implications" for British American Tobacco (BATS.L, BTI.JO) consensus estimates, as the company's recent capital markets day reaffirmed long-term 2030 targets without introducing new strategic elements. "Overall, we view the CMD as reinforcing existing strategic priorities rather than materially changing the outlook. The combination of US momentum, continued Modern Oral growth and improving profitability in New Categories supports management's medium-term objectives. However, the growth algorithm, category priorities and key assumptions remain largely unchanged. As a result, while the event provided greater detail around execution and profitability ambitions, we do not expect consensus estimates to move materially on the back of this CMD," according to a Thursday note. The research firm said the US vapor business is the tobacco giant's "most significant opportunity" discussed at the event, driven by tightening enforcement against the 7 billion-pound-sterling illicit disposable product market. As regulations become "more supportive," BAT expects its "leading" Vuse brand to benefit if 30% of illicit demand shifts back into legal channels by 2030. However, analysts added that the exact timing and scale of this recovery depend on consistent, effective enforcement. For full-year 2026, British American Tobacco expects revenue and adjusted profit from operations growth to land near the bottom of their respective 3% to 5% and 4% to 6% guidance ranges, while EPS growth is still expected around the midpoint of the guided 5% to 8% range at constant currency. Looking out to 2030, the group projects mid-teens New Category revenue growth alongside a contribution margin above 30%. According to BofA, the margin target offers "greater visibility," even if it looks "broadly consistent" with existing market assumptions. Against this backdrop, the research firm retained its buy rating on the stock, with a price objective of 53 pounds sterling.