British American Tobacco’s sudden CEO switch is “clearly a surprising development” and one that was the board’s decision, according to Citigroup.
After speaking to the company, Citigroup notes that the board believes Tadeu Marroco’s experience and focus on execution, culture change and delivery mean “he is best placed to lead BAT on the next stage of its transformation journey.”
The transformation Marroco is tasked with involves revolutionising the group away from traditional tobacco products, such as cigarettes, into vapes and heated tobacco.
Marroco is “well-liked” by investors, and he has a strong track record as CFO, especially in cost-efficiency delivery.
“As such, we continue to believe the 12-month risk/reward on BAT is skewed to the upside,” said the broker.