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BAT’s bold share buyback sparks debate as analysts split on future moves

A massive share buyback signals BAT’s confidence—but will it win over skeptical investors? The market’s mixed reactions leave shareholders at a crossroads.

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1 min read
This image is clicked in a room, where it looks like Store. There are so many bottles in this image...
This image is clicked in a room, where it looks like Store. There are so many bottles in this image and cans. There is a Banner in the middle which is indicating Supra brand. Bottom right corner there is a logo LM.

BAT’s bold share buyback sparks debate as analysts split on future moves

British American Tobacco (BAT) has taken steps to boost shareholder value, while analysts and investors express mixed views on the company's future. The tobacco giant has removed 110,000 shares from circulation through buybacks, indicating confidence in its current value. Meanwhile, the Relative Strength Index (RSI) suggests the stock may be overbought.

BAT's share price experienced a sharp intraday drop of nearly 2%, trading at 4,067p. Despite this, CEO Tadeu Marroco has shown confidence in the company's prospects by doubling down on shares through a deferred bonus scheme. The 'November 15 Analysis' has advised urgent action for BAT shareholders, though specific details remain unclear.

Analysts hold a cautious 'hold' consensus for BAT, with price targets ranging from 4,040p to 4,120p. Bank of America has raised its price target but did not provide full details on its analyst recommendation change. Five of eight broker houses recommend buying the stock, one recommends holding, and two recommend selling, with an average price target of $51.00 USD.

BAT's fundamentals remain robust, with a return on capital employed (ROCE) of 11-14% and a debt-to-equity ratio of 0.68. Institutional investors hold approximately 16.16% of BAT's shares, with some making bold moves. Zions Bancorporation, for instance, increased its stake by a staggering 46,000%.

BAT's share buyback and CEO's confidence signal positive sentiment, yet analysts and investors hold differing views. The recent price drop and mixed signals from the market suggest shareholders should closely monitor the situation and consider the advice from the 'November 15 Analysis'.

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