British American Tobacco Share Price (LON: BATS) Smokes Past 52-Week High

British American Tobacco share price (LON: BATS) today hit a new 52 week high at 3,660p, and appears to be continuing to gain into the close after a 1.25% increase on the day. BATS shares are enjoying a resurgence, building impressive momentum, up 17% over the past month, and 24% since the start of the year.

This upward trajectory culminates in a year-over-year surge of over 50%, significantly outperforming many of its FTSE 100 peers. But is this rally sustainable, or are there headwinds on the horizon for the tobacco giant?

The company's commitment to returning value to shareholders through increased dividends has made it an attractive option for income-focused investors. Recently announced August dividend of 60.06p is set to be paid to shareholders of record (on June 27th) on the 1st August.

The firm also continues to buy back stock as part of it's plan, also returning value to BATS holders.

Technically, the stock performance has also been encouraging. The stock price surpassed its 200-day moving average in March 2025, a bullish signal that often triggers increased buying interest. This crossover suggests a shift in market sentiment towards a more positive outlook for the company. The current price also sits comfortably above both short-term and longer-term moving averages, further solidifying the bullish trend.

Furthermore, BATS' strategic focus on “New Category” products, such as Vuse and Velo, is paying dividends. The company's extended partnership with McLaren Racing, encompassing both Formula 1 and Formula E teams, provides significant visibility for these reduced-risk alternatives. This move aligns with growing consumer demand for less harmful tobacco products and positions BAT for long-term growth in a rapidly evolving market.

However, the tobacco industry faces significant challenges. Regulatory pressures, including increasing taxes and stricter advertising restrictions, continue to pose a threat. Furthermore, the long-term decline in traditional cigarette consumption requires BAT to successfully transition its customer base to these new categories, a transition which is not guaranteed.

Analyst sentiment on BATS remains mixed, reflecting these competing forces. While Jefferies Financial Group maintains a “Buy” rating with a price target of 4,100, JPMorgan Chase & Co. has a “Neutral” rating with a lower target of 2,800. The overall analyst price range, with a maximum estimate of 4,400 and a minimum of 2,650, highlights the mixed view on the street.

The average price target of 3,590p now also sits below current price action, such has been the rate of ascent in recent months.

Looking ahead, investors will be closely watching BAT's upcoming earnings releases for updates on the performance of its New Category products and its overall financial health. The company's ability to navigate the challenges of the tobacco industry and capitalize on the opportunities presented by the evolving market will be crucial in determining whether it can sustain its recent rally and deliver long-term value to shareholders.