BAT stock forecast
The weighted price is 4271.32 GBp in October 2029, a 20% gain. It hinges on cigarette pricing holding up while New Categories become repeatable profit and cash.
Where could BAT's shares be by 2029?
The weighted price is 3837.28 GBp in October 2027, a 3% loss including dividends. It is 4271.32 GBp in October 2029, a 20% gain. The bear case carries 25% probability and the base case 55%. The bull case carries 20%.
At October 2027, the weighted price is 3837.28 GBp, a 3% loss including dividends. At October 2028, it is 4031.77 GBp, an 8% gain. At October 2029, it reaches 4271.32 GBp, a 20% gain.
| Case | Probability | October 2027 | October 2028 | October 2029 |
|---|---|---|---|---|
| Bear | 25 % | 2809.18 (-27 %) | 2579.74 (-27 %) | 2359.49 (-27 %) |
| Base | 55 % | 3923.09 (-1 %) | 4080.44 (+9 %) | 4269.49 (+20 %) |
| Bull | 20 % | 4886.44 (+22 %) | 5712.98 (+48 %) | 6666.11 (+78 %) |
| Weighted | 100 % | 3837.28 (-3 %) | 4031.77 (+8 %) | 4271.32 (+20 %) |
What has to go right or wrong for BAT?
In 2025, combustible volume fell 8.1%, but price and mix added 9.1%. New Categories revenue then grew 18.0% at constant currency in the first half of 2026, with a 13.3% contribution margin. The bear case gives earnings of £7,095m, £6,885m and £6,678m as volume decline, price elasticity and cash costs erode margins. The bull case gives £8,010m, £8,596m and £9,261m as Velo and Vuse gain repeat buyers and savings improve profitability. The 2030 margin ambition of 30.0% supports the direction, but not rapid delivery by 2029.
The bear case assumes cigarette volumes fall faster than expected, price rises drive trading down or illicit purchases, and New Categories fail to replace lost contribution. Settlement payments and weaker cash conversion constrain buybacks, while the multiple contracts. It gives 2809.18 GBp in October 2027 and 2359.49 GBp in October 2029. Its 25% probability reflects the 8.1% volume decline, U.S. profit concentration and cash demands, but stable adjusted margins and 2026 growth guidance limit the odds.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 7,759 (7,095 / 8,010) | 7,992 (6,885 / 8,596) | 8,284 (6,678 / 9,261) |
| Shares (millions) | 2,136 (2,147 / 2,131) | 2,115 (2,135 / 2,106) | 2,096 (2,123 / 2,084) |
| Dividends per share | 2.48 (2.45 / 2.50) | 2.52 (2.33 / 2.60) | 2.58 (2.33 / 2.70) |
| Price to earnings | 10.80 (8.50 / 13.00) | 10.80 (8.00 / 14.00) | 10.80 (7.50 / 15.00) |
How much cash does BAT really make?
Revenue slipped to £25,610m in 2025. Operating margin recovered to 39.0% after -57.7% in 2023. The company’s own free cash flow fell to 14.4% of revenue, and the key number is the 120.96p per-share cash gap between dividends paid and real free cash flow.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Cash from operations | 6,342 | 10,125 | 10,714 | 10,394 | 9,717 |
| − Capital spending | 704 | 608 | 601 | 656 | 745 |
| − Interest paid | 1,671 | 1,740 | 1,712 | 1,603 | 1,502 |
| = Free cash flow | 3,790 | 7,612 | 8,239 | 7,974 | 7,316 |
| − Stock pay | 90 | 74 | 74 | 85 | 78 |
| = Real free cash flow | 3,700 | 7,538 | 8,165 | 7,889 | 7,238 |