British American Tobacco could deliver years of accelerating growth as its investment in smokeless products starts to pay off, according to Jefferies.
The broker, which rates the shares "buy" with a 5,500p target, argued the company is at a turning point, with next-generation products set to drive around half of group revenue growth in the medium term.
On Friday, the shares were changing hands for 4,194p, implying about 30% upside.
At the heart of the case is Velo, BAT's nicotine pouch brand, a smokeless product sold as a small sachet placed under the lip.
Jefferies believes Velo could become the value share leader in the US pouch market by 2030, more than doubling its US volumes and unlocking £1.3 billion of extra annual profit.
The analysts expect the number of US pouch users to rise to 25.2 million by 2030, from 15.8 million this year.
A second tailwind should come from vaping, where BAT is rolling out flavoured products in the US ahead of most rivals, helped by tougher enforcement against illegal imports.
Its traditional cigarette business, still more than half of group profit, is on a steadier footing, with US sales returning to modest growth.
Jefferies also pointed to a much-improved balance sheet.
Debt has fallen from more than five times earnings in 2017 to the top of the company's target range this year, opening the door to larger share buybacks that could push earnings growth above the current 5% to 8% range.
The broker values BAT's smokeless businesses well below those of rival Philip Morris, arguing a re-rating of its pouch and vaping arms alone would justify 20% share price upside.
Jefferies flagged the risks, including tougher competition in US pouches, faster cigarette declines and adverse regulation.
BAT holds a capital markets day on 28 and 29 September.
