British American Tobacco p.l.c.
British American Tobacco p.l.c. Fundamental Analysis
British American Tobacco p.l.c. (BTAFF) shows moderate financial fundamentals with a PE ratio of 12.76, profit margin of 30.32%, and ROE of 16.38%. The company generates $25.5B in annual revenue with weak year-over-year growth of -5.19%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 46.6/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze BTAFF's fundamental strength across five key dimensions:
Efficiency Score
WeakBTAFF struggles to generate sufficient returns from assets.
Valuation Score
ExcellentBTAFF trades at attractive valuation levels.
Growth Score
WeakBTAFF faces weak or negative growth trends.
Financial Health Score
ModerateBTAFF shows balanced financial health with some risks.
Profitability Score
ExcellentBTAFF achieves industry-leading margins.
Key Financial Metrics
Is BTAFF Expensive or Cheap?
P/E Ratio
BTAFF trades at 12.76 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, BTAFF's PEG of 0.11 indicates potential undervaluation.
Price to Book
The market values British American Tobacco p.l.c. at 2.07 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 5.31 times EBITDA. This is generally considered low.
How Well Does BTAFF Make Money?
Net Profit Margin
For every $100 in sales, British American Tobacco p.l.c. keeps $30.32 as profit after all expenses.
Operating Margin
Core operations generate 39.40 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $16.38 in profit for every $100 of shareholder equity.
ROA
British American Tobacco p.l.c. generates $7.10 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
British American Tobacco p.l.c. produces operating cash flow of $5.68B, showing steady but balanced cash generation.
Free Cash Flow
British American Tobacco p.l.c. generates strong free cash flow of $5.13B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.37 in free cash annually.
FCF Yield
BTAFF converts 5.23% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
12.76
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.11
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.07
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.85
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.75
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.87
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.16
vs 25 benchmark
ROA
Return on assets percentage
0.07
vs 25 benchmark
ROCE
Return on capital employed
0.11
vs 25 benchmark
How BTAFF Stacks Against Its Sector Peers
| Metric | BTAFF Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 12.76 | 22.46 | Better (Cheaper) |
| ROE | 16.38% | 1263.00% | Weak |
| Net Margin | 30.32% | -5460.00% (disorted) | Strong |
| Debt/Equity | 0.75 | 1.24 | Strong (Low Leverage) |
| Current Ratio | 0.87 | 2.47 | Weak Liquidity |
| ROA | 7.10% | -192347.00% (disorted) | Weak |
BTAFF outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews British American Tobacco p.l.c.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
1.75%
Industry Style: Defensive, Dividend, Low Volatility
GrowingEPS CAGR
-45.25%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
14.57%
Industry Style: Defensive, Dividend, Low Volatility
High Growth