BATS Shares: Company Strategy ‘Driving Momentum’ Says Analyst

British American Tobacco's (LON: BATS) share price momentum has continued in the past couple of weeks, with analyst commentary from Edison highlighting what it called “meaningful progress” in British American Tobacco’s latest full-year performance, pointing to a business gaining traction across both traditional and next-generation categories.

Edison said FY25 results landed at the top end of expectations, marking the second upgrade cycle during the year, and noted that management “delivered all that was promised” operationally.

The firm pointed to a return to double-digit revenue growth in New Categories during the second half, with stronger contributions and product innovation across all three non-combustible segments.

At constant currency, group revenue rose 2.1 percent, while adjusted profit from operations increased 2.3 percent excluding Canada. Edison highlighted the return to growth in the U.S. as a key regional driver, alongside continued strength in the Americas and Europe division.

Modern Oral products, led by Velo, saw the fastest expansion, while Vapour brand Vuse showed early signs of recovery as U.S. enforcement against illicit products improved.

The analyst also flagged progress on cash generation and shareholder returns. BAT increased its FY25 buyback and plans further cash returns while continuing to deleverage. With net debt to EBITDA at 2.55x at year-end, Edison expects leverage to fall within the 2.0–2.5x target range by the end of FY26.

Looking ahead, management anticipates higher growth in FY26, targeting 3–5 percent revenue expansion and low double-digit gains in New Categories. Edison said BAT has entered the year with “clear momentum,” supported by improving U.S. trends, sustained regional strength and moderating headwinds in Asia-Pacific, the Middle East and Africa.