British American Tobacco (BATS)

Sector:

Tobacco

Index:

FTSE 100

2,952.00p
   
  • Change Today:
      48.00p
  • 52 Week High: 3,669.00
  • 52 Week Low: 2,375.00
  • Currency: UK Pounds
  • Shares Issued: 2,293.81m
  • Volume: 831,901
  • Market Cap: £67,713m
  • RiskGrade: 153
  • Beta: 0.03

Morgan Stanley sounds note of caution over tobacco in otherwise upbeat HPC review

By Abigail Townsend

Date: Monday 15 Jul 2019

LONDON (ShareCast) - (Sharecast News) - Morgan Stanley has backed the household, personal care and cosmetics sector - but sounded a note of warning about tobacco companies.
In a note assessing European staples, Morgan Stanley said that heading into the second half, \"we remain positive on the attractive HPC sector\".

It cited a number of reasons, including companies enjoying \"a margin sweet spot in the second half, as pricing sticks and volumes hold up. With the sector on record high margins but offering more subdued topline growth, we expect the margin windfalls to be reinvested for growth.\"

The bank also highlighted improved growth in emerging markets; management changes at a number of companies; and at least six of the companies it tracks, including Danone and Reckitt Benckiser, expecting an acceleration in growth in the second half.

But Morgan Stanley also said it was \"treading cautiously in tobacco, where we see sector-specific structural headwinds.\"

The bank said that Swedish Match, which is scheduled to publish second-quarter numbers on 18 July, was its \"most attractive pure play in EU/US tobacco\".

It continued: \"While we believe that a maximum nicotine level and a flavour ban will impact Swedish Match\'s US cigars business, we see the risk profile improving post the US-wide launch and growing success of [nicotine pouch brand] Zyn.

\"We remain \'overweight\' on Swedish Match and believe the markets continue to under-appreciate the superior pricing power, favourable demographics and Zyn optionality.\"

However, Morgan Stanley remains \'underweight\' on British American Tobacco, noting that the company had \"limited visibility on growth sustainability\" despite moving into fast-growing new categories like vaping.

The bank said: \"We like BAT\'s market leadership position in more than 50 markets, strong brands and diversified product range. However, in our view BAT is at risk from any potential implementation of a nicotine reduction policy before 2040.\"

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

BATS Market Data

Currency UK Pounds
Share Price 2,952.00p
Change Today 48.00p
% Change 1.65 %
52 Week High 3,669.00
52 Week Low 2,375.00
Volume 831,901
Shares Issued 2,293.81m
Market Cap £67,713m
Beta 0.03
RiskGrade 153

BATS Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value Not Available
Price Trend
50.72% below the market average50.72% below the market average50.72% below the market average50.72% below the market average50.72% below the market average
100% below the sector average100% below the sector average100% below the sector average100% below the sector average100% below the sector average
Income
90.04% above the market average90.04% above the market average90.04% above the market average90.04% above the market average90.04% above the market average
100% below the sector average100% below the sector average100% below the sector average100% below the sector average100% below the sector average
Growth
55.23% above the market average55.23% above the market average55.23% above the market average55.23% above the market average55.23% above the market average
100.00% above the sector average100.00% above the sector average100.00% above the sector average100.00% above the sector average100.00% above the sector average

What The Brokers Say

Strong Buy 14
Buy 0
Neutral 4
Sell 1
Strong Sell 1
Total 20
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

BATS Dividends

  Latest Previous
  Q4 Q3
Ex-Div 24-Dec-19 03-Oct-19
Paid 06-Feb-20 14-Nov-19
Amount 50.75p 50.75p

Trades for 17-Sep-2019

Time Volume / Share Price
11:47 7 @ 2,952.00p
11:47 40 @ 2,952.00p
11:47 789 @ 2,952.00p
11:46 6 @ 2,953.50p
11:46 80 @ 2,953.50p

BATS Key Personnel

Chair Richard Burrows
CEO Jack Bowles
Finance Director Tadeu Marroco

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