BAT reports 2025 results ahead of forecasts, reiterates guidance

Investing.com -- British American Tobacco reported a modest top-line beat for the 2025 financial year (FY25), and reiterated full-year guidance, which was at the lower end of its medium-term framework.

The stock was choppy in early London trading following the results.

Organic sales growth (OSG) came in at 2.1%, slightly ahead of the 1.9% consensus cited by Bank of America. Adjusted EBIT excluding Canada rose 2.3%, also marginally above expectations. Adjusted diluted EPS was 340.5 pence, 0.8% ahead of consensus, BofA noted.

Margins expanded modestly, with around 7 basis points of organic margin improvement at the group level, supported by stronger performance in the U.S. and AME regions. New Categories margins were around 11.8%.

Regionally, the U.S. remained the key growth engine, delivering organic sales growth of 5.5%, driven by pricing in combustibles and very strong growth in Modern Oral, up 310% organically.

AME posted organic sales growth of 3.3%, though combustibles volumes were softer in the second half. APMEA was the main drag, with organic sales down 7.2% and adjusted EBIT falling 17.9%, reflecting volume declines in Bangladesh and Australia.

For FY26, BAT reiterated guidance at the lower end of its algorithm, expecting revenue growth of 3–5% and adjusted EBIT growth of 4–6% . The company also extended its annualised cost savings programme to around £600 million and delivered dividend growth of 2% in line with expectations.

BofA analysts reiterated their Buy rating on the stock, saying the results “reinforce confidence in margins and buybacks." The bank trimmed its FY26 sales growth estimate slightly due to softer APMEA trends but raised its adjusted EBIT growth forecast on higher margin expansion, lifting its FY26 EPS estimate by 1.1%.

The bank also raised its price target to 4,700p from 4,500p.

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