British American Tobacco PLC (LSE:BATS) will publish a first-half trading update on Tuesday 3 June, with investors watching to see if recent momentum in the share price is warranted.
The update is expected to provide commentary on trading and guidance reaffirmation, without a full set of financials.
The group last guided for revenue growth of 1% and adjusted operating profit growth of 1.5-2.5%, excluding Canada, with the second half of the year expected to carry greater weight. The consensus forecast for adjusted operating profit in 2025 is £11.6 billion.
BAT’s shares have rebounded to around £33, up more than 40% over the past year, after falling below to a 13-year low in late 2023 and early 2024 following a £25 billion write-down on its cigarette brands as part of its shift toward becoming a majority “smokeless” business by 2035, plus an enforced withdrawal from Russia and an $8 billion Canadian settlement, alongside changes in leadership as CEO Jack Bowles stepped down and was succeeded by finance chief Tadeu Marroco.
Investors are likely to scrutinise revenue trends in the company’s New Categories division, which includes vapour products, heated tobacco, and oral pouches. Analysts expect a 13% increase in annual sales to £3.9 billion from these categories.
With the shares having recovered from several blows in recent years, investors "seem to be looking at how the company continues to generate copious cash flow, sell expensive India shareholdings to buy back its own stock on lower valuations and continue to grow its dividend, even as regulatory and health concerns drive down volumes," said AJ Bell’s Russ Mould.
Panmure Liberum has called tobacco one of the most compelling UK market stories in 2025, citing a combination of value, income, and resilience. Despite the rally, the broker says both British American Tobacco and peer Imperial Brands remain undervalued and offer double-digit return potential.