British American Tobacco Shares (LON:BATS) Hit Highest Level In Years – The Latest

British American Tobacco shares (LON:BATS) have surged to their highest levels in years today at 4,329p, driven by robust financial performance, a rebounding U.S. market, and growing investor confidence in the company's shift towards smoke-free alternatives.

BATS has been a notable outperformer over the past year, adding 54% on the period, with a firm break of the 3,500p setting up an acceleration over the past couple of months. The five year chart below highlights what has been a remarkable shift in sentiment.

BAT's strong recent performance is underpinned by a 1.7% increase in profit at constant currency during the first half of 2025, exceeding market expectations. A key driver was a 3.7% rise in U.S. revenues, the first increase in three years. T

he U.S. market, which accounts for approximately 44% of BAT's total sales, benefited from robust demand for “new category” products, particularly Velo nicotine pouches, which saw a 3.9% sales increase, with smokeless products now constituting over 18% of BAT’s total revenue.

EPS beat both forecasts, and the previous years level, and the company also guided revenue growth at the upper end of its 1%-2% forecast.

While traditional combustible tobacco products still account for 75% of industry sales, companies like BAT are investing heavily in reduced-risk products to align with changing consumer preferences.

BAT is also enhancing its brand visibility through strategic partnerships including the extension of its collaboration with McLaren Racing, which began in 2019. This multi-year extension includes branding opportunities for BAT's “new category” products, such as Vuse and Velo, on McLaren's Formula 1 and IndyCar vehicles.

With markets having to look back almost a decade for previous price action at these levels, there is some price discovery taking place as BATS looks to find it's valuation. Stair stepping higher for more than 18 months, with a dividend above 5% has made the shares an attractive proposition. Time will tell where valuation sits, but for now, bulls are certainly enjoying the ride higher.