British American Tobacco stock gets Goldman upgrade on growth path

Published on 11/04/2026 at 10:02 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWS

British American Tobacco stock received a Goldman Sachs upgrade on a clearer growth path. New Categories and the December trading update are key catalysts.

Growth case shifts toward new categories

Goldman Sachs sees stronger momentum from nicotine pouches and vapor products.
The United States remains BAT's most strategically important market, while regional recovery is expected from 2027.
BAT's December trading update is the next major operating milestone for investors.

BAT, GB0002875804, Illustration mit AI erstellt.

Goldman Sachs upgraded British American Tobacco from Neutral to Buy on Monday, November 2, arguing that the tobacco group has a clearer path toward sustained organic revenue growth. The bank raised its 12-month price target to 5,600 pence from 5,200 pence, according to Investing.com.

Goldman expects BAT's organic sales growth to move toward the midpoint of management's 3% to 5% guidance range. The brokerage forecasts organic sales growth of about 4% in both 2027 and 2028, after four years in which low-single-digit growth remained below management's target.

New Categories drive the outlook

The bank pointed to resilient combustible tobacco sales and accelerating New Categories as the main supports for its view. Velo Max, a nicotine pouch launched in September, had reached 44,000 outlets by October, with a further 55,000 outlets expected by January 2027.

Vuse also features prominently in the thesis. Its vapor volumes rose 20% through August in US states with observable regulatory enforcement, nearly twice the industry growth rate cited in the report. Goldman expects medium-term operating profit growth of 5% to 6% as New Categories expand.

The United States accounts for more than 60% of BAT's operating profit and remains the group's most strategically important market. Goldman also expects the Asia-Pacific, Middle East and Africa region to return to growth from 2027 as current headwinds in Bangladesh and Australia begin to annualize.

Risks and next operating milestone

The upgrade is not based on an absence of risks. Goldman cited adverse regulation, US Food and Drug Administration enforcement, and authorization delays as potential obstacles. The bank also reduced its earnings-per-share forecasts for 2027 and 2028 by 0.4% and 1.3%, respectively, reflecting updated industry assumptions and exchange-rate movements.

For the wider investment case, Goldman forecasts average earnings-per-share growth of 9% over five years, supported by debt reduction and faster share buybacks. It also expects average annual free cash flow of about 9.5 billion pounds through 2030, above BAT's guidance of about 8 billion pounds.

British American Tobacco stock traded at 54.36 euros on Lang & Schwarz at 10:00 CET on Wednesday, November 4, 2026. The real-time quote of British American Tobacco stock places the focus on the analyst reassessment rather than on a verified Xetra day comparison.

The company's full-year 2026 trading update in December is expected to show stronger second-half momentum, making execution in New Categories and the revenue trajectory the next key tests for the investment case.

Broader market sentiment can be followed in current FTSE 100 market reports.

Further company-specific coverage is available in more news and analyses on British American Tobacco stock.