British American Tobacco Earns Buy Upgrade on 7% New Category Growth and £2bn Savings Plan
British American Tobacco’s New Category revenue rose 7% in FY2025, outpacing expectations and driving a buy rating upgrade. The company forecasts low double-digit New Category growth in FY2026 and targets £2 billion in operational savings by 2030 alongside AI-driven productivity initiatives to bolster profitability.
1. Rating Upgrade Rationale
Analysts upgraded the company to a buy after FY2025 results exceeded expectations, signaling renewed growth potential and improved profitability.
2. New Category Growth and Guidance
New Category revenue increased 7% in FY2025, driven by stronger US performance and the Vuse product recovery, with guidance for low double-digit growth in FY2026.
3. Cost Savings and Productivity Initiatives
The company plans to deliver £2 billion in operational savings by 2030 and is implementing AI-driven productivity initiatives to enhance profitability and return on investment.