BAT Stock Drops Over 8% on Lower Revenue Expectations

BAT by 2FIRSTS.ai
Dec.07.2023
BAT Stock Drops Over 8% on Lower Revenue Expectations
British American Tobacco's stock price fell over 8% to £22.66, with lower revenue expectations due to macroeconomic pressure in the US.

According to Shares Magazine, the stock price of British American Tobacco (BAT) dropped over 8% to £22.66 on the latest trading day. The company's full-year revenue expectation is projected to fall below the predicted range of 3% to 5%. However, BAT has not adjusted its outlook for the entire year of 2023 or its earnings per share. The company attributes its decline in performance to the impact of macroeconomic pressures in the United States on cigarette product sales.

 

Chris Beckett, Head of Stock Research at Quilter Cheviot, has stated that "British American Tobacco's latest financial report is in line with expectations, but it is not the catalyst needed to reverse the negative sentiment towards the company and its significantly undervalued status.

 

We continue to believe that this valuation is too low, particularly when compared to its closest competitor, Philip Morris," Beckett stated.

 

The British American Tobacco company has expressed its commitment to "building a smoke-free world," with 50% of its revenue derived from non-combustible products by 2035.

 

The performance of Glo's heating products has been a mixed bag so far this year. Disappointingly, the company's performance has been affected by slowing industry growth in Japan and Italy, increasing versatility in products, and intensified competition.

 

Glo Hyper Air has performed as expected with the launch of their new product veo in October. This global tobacco company introduced a range of non-tobacco consumer goods in 10 markets across Europe.

 

The market share of Vuse has increased by 100 basis points, reaching 36.8% in key markets. The tobacco company stated that this growth in revenue was driven by an increase in the number of consumers for its product, Vuse Go, which is now available in 59 markets.

 

Russ Mould, the investment director at AJ Bell, stated:

 

The British American Tobacco Company is currently undergoing a significant period of transformation, with a target to have half of its revenue come from non-combustible products by 2035. Additionally, it is facing challenges in adapting to the difficult market conditions in the United States.

 

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