Should I buy British American Tobacco stock in 2025?

What is British American Tobacco?

How much is the British American Tobacco stock?

The price of British American Tobacco stock is falling this week. The current price stands at 3,305.00 pence (33.05 GBP), with a 24-hour change of -29.00 pence (-0.87%). While the weekly performance data is not available, BAT has a robust market capitalization of £72.41 billion and an average trading volume over the past 3 months of 6.13 million shares. The stock’s P/E ratio is 24.12, offering a strong dividend yield of 7.27%, and features a beta of 0.26, indicating low volatility. This combination of stability and attractive income could be appealing for South African investors seeking steady returns.

Our complete analysis of the British American Tobacco stock

Having thoroughly examined British American Tobacco’s latest financial results alongside the stock’s robust three-year trajectory, our proprietary models draw from an extensive blend of quantitative and qualitative data—encompassing company fundamentals, technical market indicators, live pricing, and peer group analysis. This rigorous multi-factor approach ensures a data-driven perspective on where BATS stands amid a rapidly transforming global consumer sector. So, why might British American Tobacco stock once again become a strategic entry point into the defensive consumer segment in 2025?

Recent Performance and Market Context

Over the last twelve months, British American Tobacco (BAT) has delivered an impressive resurgence, significantly outpacing its historical sector performance. As of 30 May 2025, BATS trades at 3,305.00p, reflecting a surge of +40.28% over the past year and +18.53% in the last six months. Few large-cap consumer defensive names have demonstrated such sustained resilience and upside in the current macroeconomic environment—an environment marked by persistent consumer uncertainty, inflationary pressures, and fluctuating global demand.

What underpins this robust momentum? First, BAT’s financial health remains a clear differentiator. The recent £1.42 billion capital injection from the partial divestment of its ITC Ltd stake in India has fortified balance sheet flexibility, reinforcing BAT’s commitment to deleveraging and disciplined cash allocation. This reallocation of resources allows management to hedge against sector headwinds while investing strategically for growth.

Encouragingly, the macro backdrop has shifted in favour of large, cash-generative consumer brands. Amid global market volatility, investors are seeking stability and yield, characteristics that BAT—in one of the world’s most regulated and recession-resistant industries—has demonstrated consistently. Notably, the company’s 7.27% dividend yield stands as a compelling income alternative in a world where real yields remain subdued, especially relevant for South African investors seeking currency diversification and sturdy offshore assets.

Technical Analysis

The technical configuration of BATS suggests a phase of constructive consolidation, with subtle bullish signals that cannot be overlooked—particularly attractive for medium-term strategy positioning. Although short-term momentum oscillators offer mixed signals (the 14-day RSI rests at a neutral 45.51, while MACD at -3.7 signals lingering caution), the stock’s alignment relative to key moving averages is noteworthy.

• Long-term Moving Averages: Both MA100 (3,231.6p) and MA200 (3,217.6p) sit well below the current price, confirming an underlying bullish structure and acting as dynamic support levels for the year ahead.
• Short-term Averages: The MA20 (3,320.6p) and MA50 (3,315.2p) are hovering near current pricing, temporarily capping upward momentum. However, any decisive break above these averages could trigger the next bullish leg.
• Support & Resistance: Strong support is seen at 3,279p, very close to the current trading zone, further minimising downside risk. Major resistance at 3,415p (the 52-week high) forms the next logical bullish target, offering almost 3.3% upside from current levels, with consensus analyst targets suggesting further appreciation to 3,495.5p (+5.76% potential).

Short, sharp technical consolidations in high-quality, high-yield names like BAT often precede periods of sustained upward repricing. The current formation seems to represent an excellent opportunity for accumulation, particularly for investors seeking defensive exposure with re-rating potential.

Fundamental Analysis

BAT’s core fundamental proposition continues to shine in an often-volatile market. Despite a nominal revenue decline of 5.2% in 2024 (£25.87 billion), the group delivered a solid +1.3% increase in organic, adjusted revenue, underscoring strong operational resilience. EBITDA stands at £11.82 billion, reinforcing expansive margins, while net profit rests at £3.07 billion with earnings per share of £1.37. These headline metrics speak to BAT’s enduring profitability, robust cost discipline, and sharp execution against budget expectations.

Importantly, compared to its global peers, BAT’s current P/E ratio of 24.12 appears justified—especially when contextualised with the company’s above-sector average growth in next-generation products and consistently high cash conversion. The embedded dividend yield of 7.27% reflects not only generous shareholder returns but an underlying confidence in medium- and long-term cash flows, even as legacy cigarette volumes fall.

Strategic expansion remains a persistent growth engine. BAT continues to invest in next-generation products (vaping, heated tobacco, and nicotine pouches) that now contribute a growing share of profits—new categories represented a margin of 7% in 2024, with management signalling further gains ahead. Brand equity, as evidenced by Dunhill, Lucky Strike, and Pall Mall, empowers BAT to defend market share in legacy products while deploying marketing resources to capture new segments. This formidable brand portfolio, combined with relentless innovation and a flexible balance sheet, places BAT in a unique position to benefit from evolving consumer habits without exposure to more cyclical or high-beta consumer staples.

Volume and Liquidity

BAT’s trading volume continues to demonstrate sustained strength and market participant conviction. With a three-month average daily turnover of 6.13 million shares (~£202 million in daily notional value), liquidity is robust and far exceeds thresholds common in most emerging-market opportunities. This depth of float ensures there is sufficient room for both institutional and retail investors to enter or exit positions efficiently, which is a significant plus for South Africa-based traders seeking offshore diversification without sacrificing liquidity or execution quality. Moreover, BAT’s £72.41 billion market cap positions it among a rarefied group of mega-cap, globally followed names—often leading to enhanced price discovery and dynamic valuation adjustments in times of sector rotation.

Such ample liquidity and a wide investor base frequently serve as an early indicator of market confidence and institutional interest. As the stock remains highly traded, technical and momentum-driven surges are all the more likely to materialise when catalysts emerge, further supporting the bullish case.

Catalysts and Positive Outlook

Several upward drivers continue to support a favourable outlook for BAT, pointing to structural outperformance potential into 2025 and beyond. Among the most salient are:

• Growth in Next-Generation Categories: BAT’s significant investments in new nicotine delivery systems are clearly bearing fruit. With new categories delivering an increased contribution margin (7% in 2024) and management reiterating commitment to this transition, the group is actively mitigating secular declines in conventional tobacco volumes. This hedges regulatory and consumption headwinds while unlocking new markets and younger demographics.
• Portfolio Optimisation: The ITC divestment reflects prudent capital allocation. It enhances BAT’s agility in reallocating resources, reducing leverage, and funding R&D for next-generation brands. Such moves signal a sharp focus on long-term operational efficiency and growth.
• Digital Transformation: Accelerated investment in data, marketing analytics, and customer engagement platforms continues to drive deeper market penetration, particularly for reduced-risk products. BAT’s digitalisation push ensures that the group remains ahead of shifting consumer preferences.
• Supportive Macroeconomic Factors: In a world where defensive assets again command a premium amid global risk-off sentiment, consumer staples—especially those with entrenched cash flows—are increasingly favoured. BAT stands out thanks to its global revenue base, attractive yield, and sector-leading scale.
• ESG Initiatives: BAT has intensified efforts in sustainability, enhancing its environmental and social credentials—a trend increasingly valued by global institutional investors and required by regulatory developments.
• Market Consensus: The “Buy” consensus among analysts, alongside a 5.76% implied upside to the consensus target, strongly supports the conviction that BAT’s valuation has potential to rerate as technical and fundamental catalysts coalesce.

Investment Strategies

Current market conditions seem highly conducive for constructing positions in BAT across short-, medium-, and long-term time horizons:

• Short-Term: With the stock trading above long-term support but consolidating near key short- and medium-term moving averages, tactical investors might view the 3,279p–3,305p zone as a technical low that offers limited downside and ample scope for rebound toward the 3,415p resistance. An upside break above compressing short-term averages could initiate a new mini-bull phase.
• Medium-Term: For those eyeing a 3–12 month window, BAT’s positive financial trajectory, volume growth in new categories, and supportive industry sentiment underpin a strong case for holding through earnings cycles and expected catalysts such as further portfolio optimisation and continued deleveraging.
• Long-Term: For patient, income-oriented investors, BAT’s defensive qualities, outstanding dividend yield, and persistent reinvestment in next-generation products provide a compelling profile. This is particularly attractive for South African investors looking to anchor portfolios with globally diversified, resilient holdings capable of generating steady offshore income.

Optimal positioning likely resides in accumulating during current consolidations, with an eye on upcoming catalysts and expected upward price action as targets are revised in light of continued execution.

Is It the Right Time to Buy British American Tobacco?

In summary, British American Tobacco demonstrates a compelling mix of robust fundamentals, formidable brand equity, strategic transformation, and resilient technical structure—an enviable combination in today’s uncertain investment landscape. The stock recalls all the hallmarks of an undervalued, high-quality defensive name poised for further re-rating as underlying catalysts—growing next-gen product revenue, disciplined portfolio optimisation, digital acceleration, and sector-leading dividend yield—play out.

With persistent institutional support, global diversification benefits, and a well-established pipeline of strategic growth drivers, BAT seems to represent an excellent opportunity for investors seeking to blend portfolio stability with high-yield, offshore exposure. The fundamentals, momentum, and improving sentiment justify renewed interest in BAT as a key holding for 2025 and beyond.

For South African investors evaluating the next phase of global consumer sector investment, British American Tobacco’s convergence of value, yield, and growth potential may offer precisely the asymmetric upside so widely sought in today’s evolving markets. Now may be a particularly compelling juncture to watch as the catalysts come into focus and technical levels invite strategic entries.

How to buy British American Tobacco stock in South Africa?

Buying British American Tobacco (BAT) shares online has never been easier or more secure for South African investors. Regulated brokers now provide seamless digital access to global stock exchanges, letting you own BAT shares from the convenience of home. Generally, you choose between two main methods: buying shares outright (“spot” or “cash” buying), or trading Contracts for Difference (CFDs), which let you speculate on price movements. Both options offer distinct advantages and risks. Read on for clear details—and find our updated broker comparison further down the page to help you choose the option that suits your needs best.

Spot Buying

A cash purchase of British American Tobacco stock means you buy real BAT shares in your name via an authorised broker. You become a direct shareholder, eligible to receive dividends and to benefit from any share price growth. South African brokers typically require a fixed commission per order (often in the range of R80–R200, or a small percentage of the trade value).

Example

Suppose the BAT share price is 3,305 GBp (which is £33.05, roughly R800 at R24/GBP). With a R20,000 stake (about $1,000), you could buy 25 shares (R20,000 ÷ R800 per share = 25), factoring in around R100 brokerage.
Gain scenario: If BAT’s price rises by 10%, your shares are now worth R22,000.
Result: +R2,000 gross gain, i.e. +10% on your initial investment.

Trading via CFD

CFD (Contract for Difference) trading allows you to speculate on British American Tobacco’s share price without owning the actual shares. You trade with a broker, agreeing on the price difference for BAT between when you open and close your position. CFD brokers charge a spread (the difference between buy and sell prices) and may apply overnight financing fees if you hold a position beyond one day. CFDs also let you use leverage to magnify your exposure—meaning potential gains (and losses) are multiplied.

Example

With a R20,000 stake and 5x leverage, your market exposure is R100,000 worth of BAT shares.
Gain scenario: If the stock rises by 8%, your position gains 8% × 5 = 40%.
Result: +R8,000 gain on your initial R20,000 (before fees).

Final Advice

Before investing, it’s essential to compare different brokers’ costs and trading conditions—fees, currency conversion, and platform reputation all affect your returns. Whether you prefer to hold real BAT shares for long-term growth and dividends, or to trade CFDs for flexible, leveraged exposure, your choice depends on your investment goals and risk tolerance. Check our broker comparison table below to find the best match for your strategy and get started with confidence.

Our 7 tips for buying British American Tobacco stock

The latest news about British American Tobacco

British American Tobacco’s strong dividend yield of 7.27% reinforces the stock’s attractiveness for South African income investors. BAT continues to deliver robust, regular dividends, a particularly relevant factor for the South African market where investors value consistent income streams, especially amid local currency and macroeconomic volatility. This high yield, supported by solid cash generation and a well-established dividend track record, positions BAT favorably compared to other multi-listed consumer stocks available on the Johannesburg Stock Exchange (JSE), underpinning its popularity with SA institutional and private portfolios.

BAT’s recent sale of a 2.5% stake in India’s ITC Ltd for approximately $1.42 billion enhances its financial flexibility and balance sheet quality. The proceeds from this transaction are being used primarily to reduce BAT’s debt, further supporting its investment-grade credit rating and strengthening its ability to invest in new growth categories. This deleveraging strategy is constructive for South African investors, given that financial stability and discipline are particularly valued in emerging markets contexts and by local pension funds, offering greater confidence in both dividend security and future capital allocation.

South Africa remains a key market with positive signals for BAT’s reduced-risk product (RRP) strategy and well-known premium brands. BAT holds a leading presence in South Africa, with brands such as Dunhill and Lucky Strike enjoying significant market share. The gradual roll-out and regulatory approval for alternative products—like vaping and tobacco-heated devices—in the region aligns with broader company strategic evolution. South Africa’s market, with its growing adult consumer base and relatively progressive stance towards RRPs, represents an opportunity to offset global cigarette volume declines and support medium-term revenue resilience.

BAT’s most recent 2024 results met expectations, with stable earnings and encouraging organic growth in core categories. Despite headline revenue declining by 5.2% due to FX and deconsolidation effects, BAT reported a positive 1.3% organic revenue increase and EBITDA of £11.82 billion. The market’s reaction was muted but constructive, and the company’s ability to meet guidance against a backdrop of regulatory and volume pressures has been noted as a signal of resilience by South African analysts tracking the counter on both LSE and secondary listings in the region.

Analyst consensus signals a moderate upside, with a “Buy” rating and a 5.76% potential target price increase, supported by long-term technical indicators. The analyst community remains moderately optimistic on BAT, with the current price below the consensus target and favorable long-term technical support from the 100-day and 200-day moving averages. This combination of a constructive analyst outlook and a relatively low volatility profile (beta 0.26) gives South African professionals confidence in the stock as a defensive anchor, particularly within diversified portfolios seeking hard currency exposure and relative stability.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.