Goldman upgrades BAT on clearer path to sustained revenue growth
Goldman Sachs upgraded British American Tobacco (BAT) to 'buy' from 'neutral', raising its price target to 5,600 pence. The firm expects 4% organic sales growth in 2027-2028, driven by resilient combustible sales and New Categories growth. BAT trades at 12 times expected 2027 earnings, with a dividend yield near 6%. Goldman forecasts 5%-6% medium-term operating profit growth and 9% average EPS growth over five years, citing Velo Max and Vuse vapour volume growth as key drivers.
How this was made
The 30-second read
Why it matters
Analyst upgrade with a higher target is a fresh catalyst that can attract new buying, especially given the implied 22% upside and a 6% dividend yield.
Market read
The upgrade is likely to generate short‑term buying pressure in BTI and may influence sentiment in the broader tobacco sector.
What to watch
Potential slowdown in combustible sales and higher taxation could offset growth in new nicotine products.
Background
Goldman Sachs cites clearer organic revenue growth, new nicotine pouch rollout, and improved profit forecasts as reasons for the upgrade.
Ticker impact
Goldman Sachs upgraded British American Tobacco to "buy" and raised its 12‑month price target to 5,600 pence, implying ~22% upside.
upward pressure as the market prices in the upgraded rating and higher target.
Analyst upgrade with a concrete price target is a fresh catalyst; investors typically react positively to a buy rating and implied upside.
Market effects
Tobacco sector may see modest rally as the upgrade highlights growth potential in new categories.
UK and European markets could see slight upside in related consumer staples stocks.
Limited to tobacco and consumer staples investors; no broad market impact.
Counterpoint
The upgrade may be premature if regulatory risks in the US and Europe intensify.
Key entities
- companyBritish American Tobacco
Global tobacco maker, ticker BTI.
- analystGoldman Sachs
Investment bank providing the upgrade and price target.
