British American Tobacco (1K) | Buy | The NGP flywheel gains momentum

Research evidence excerpt

British American Tobacco (1K) | Buy | The NGP flywheel gains momentum

#Earnings preview Positive #TPchange

Release date: 18 May 2026

Company research

Buy ESG profile British American Tobacco

United Kingdom | Tobacco Beta Profile: MCap: GBP104.9bn

Target Price: 5,500.0p (4900.0) Change in TP: 12.2% Bloomberg: BATS LN Reuters: BATS.L

Current Price: 4,864.0p Change in Sales: 0.3% 26E/0.5% 27E Free float 96.6%

Avg. daily volume (GBPm) 231.7 Up/downside: 13.1% Change in Adj EBIT: 0.3% 26E/0.7% 27E

YTD abs performance 15.4%

Market data: 15 May 2026 Change in Adj. EPS: 2.5% 26E/1.1% 27E

52-week high/low (p) 4,962.0/3,187.0

The NGP flywheel gains momentum Price performance

Why this report?

Ahead of BAT’s H1 pre-close trading update on 2 June, we update our 5,000

forecasts to reflect stronger-than-expected momentum, led by continued 4,8004,600

strength in US modern oral and a newly revived opportunity in US vapour 4,4004,200

following recent positive developments from the FDA. As outlined in our 4,000

3,800

December initiation, the US business remains the central pillar of our 3,600

investment thesis, while our previous forecasts did not assume any 3,4003,200

meaningful positive contribution from vapour before the end of 2026. 3,000

May 25 Nov 25 May 26

Positive results from key peers reinforce our confidence that momentum is

building. In addition, following encouraging NGP launches across AME and Price Stoxx Europe 600 (rebased)

APMEA, we raise our forecasts, mainly in Vapour and Modern Oral, over the

2026–28E period. As we move into H1 results, we expect FY performance to

remain H2-skewed, with further encouraging signs of NGP penetration. As we

still see clear upside, we roll forward our valuation, reiterate our BUY rating FY to 31/12 (GBP) 12/26E 12/27E 12/28E