Should I buy British American Tobacco shares in 2025?

Why trust HelloSafe ?

At HelloSafe, our expert has been tracking the performance of British American Tobacco for over three years. Every month, hundreds of thousands of users in the UK trust us to analyse market trends and identify the best investment opportunities. Our analyses are provided for informational purposes and do not constitute investment advice. In accordance with our ethical charter, we have never been, and will never be, compensated by British American Tobacco.

What is British American Tobacco?

How much is British American Tobacco stock?

The price of British American Tobacco stock is rising this week. As of the latest update, the stock trades at 3,507.00p, up 43.00p (+1.24%) over 24 hours, with a strong gain over the past week. British American Tobacco’s market capitalisation stands at £76.74 billion, with an average three-month trading volume of 6.34 million shares. The P/E Ratio is 25.79, and the stock currently offers an attractive dividend yield of 6.94%. Its beta of 0.15 reflects notably low volatility compared to the broader market, making it appealing for those seeking stable returns.

Our full analysis on the British American Tobacco stock

Following a rigorous review of British American Tobacco’s latest financial results and examining the stock’s robust performance over the past three years, our analysis integrates a diverse set of financial indicators, technical market signals, peer benchmarks, and proprietary algorithmic rankings. Drawing on this comprehensive approach, we seek to distil why British American Tobacco’s trajectory remains compelling, particularly given the evolving global landscape and sector-specific innovation. So, why might British American Tobacco stock once again become a strategic entry point into the consumer defensive sector in 2025?

Recent performance and market context

British American Tobacco has enjoyed a considerable resurgence, with its share price reaching 3,507.00p, representing a notable 1.24% uptick in the most recent session and an impressive 42.85% rise over the past 12 months. This recovery signals renewed investor enthusiasm and marks a substantial reversal from lows seen earlier in the cycle. Bolstering this optimism, market capitalisation now stands at £76.74 billion, reaffirming the company’s blue-chip status and broad appeal amongst institutional and retail investors.

Recent positive drivers include the announcement of a progressive 240p per share dividend, a robust share buyback programme valued at £1.1 billion, and marginally upgraded profit guidance at 1.5–2.5% growth in operational profit for 2025. The group’s outlook is further buoyed by strategic innovation, such as the rollout of reduced-risk products (glo Hilo and Vuse Ultra) and continued regulatory focus on harm reduction, both of which are gaining increased acceptance across key geographies. The macroeconomic backdrop, with stabilising consumer sentiment and resilient pricing power for consumer defensives, further sets the stage for sector outperformance despite lingering regulatory headwinds.

Technical analysis

On the technical front, British American Tobacco stock offers a favourable landscape for bullish investors. The 14-day RSI stands at 49.59, reflecting a balanced market mood, but with bullish undertones. The MACD currently delivers a strong buy signal, confirming the ongoing upward price movement and suggesting that the momentum is sustainable.

Most notably, moving average analysis is overwhelmingly positive: the 50-, 100-, and 200-day moving averages have each turned up, reinforcing the case for medium- and long-term strength, even as the short-term 20-day average hints at consolidation. The stock maintains strong support around the 3,341p Fibonacci S1 level, providing technical assurance and acting as a springboard for further gains should bullish momentum persist. Upside resistance is registered at 3,629p, a point which, once surpassed, could trigger a renewed buying wave capped off by positive consensus signals—10 positive against just 2 negative from key technical indicators.

Fundamental analysis

British American Tobacco delivers robust fundamentals, with 2024 group revenues sitting at £25.867 billion and an EBITDA estimated around £11 billion—testament to its unrivalled cash-generative capacity. While reported revenue saw a nominal decline, organic growth remains firmly positive, propelled by strong new category performance (+8.9% organically). Guidance for 2025 has already been modestly revised upwards, signalling management confidence in future prospects.

Profitability remains a core strength, with an adjusted earnings per share of 362.5p and an operational profit margin placing the group near the top of its sector. The stock’s current P/E ratio of 25.79 is justified through a powerful combination of sector leadership, yield, and a transformative strategy aiming to be majority smoke-free by 2035. The company’s brand portfolio, led by Dunhill, Kent, Lucky Strike, Pall Mall, and Newport, delivers structural advantages, helping to drive market share gains across both traditional and next-generation nicotine platforms. Operational cash conversion is above 90%, further supporting significant shareholder returns and future acquisitions.

Volume and liquidity

Sustained, above-average trading volumes speak to the high level of market confidence and liquidity in British American Tobacco shares. The average three-month volume of over 6.3 million shares enables dynamic capital flows, ensuring flexibility for both institutional and private investors. A large and diversified free float, complemented by strong institutional backing, encourages smooth price discovery and responsive valuation adjustments—invaluable attributes during shifting market cycles or periods of strategic repositioning.

Catalysts and positive outlook

Several distinct catalysts underpin the current optimism around British American Tobacco. Chief among these is the company’s transition towards a “Smokeless World,” backed by tangible targets and reinforced by recent product launches (notably, the advanced glo Hilo heated tobacco device and Vuse Ultra vaping platform). Performance in the fast-growing U.S. market has been remarkable, especially for Velo Plus, securing early-mover advantages and future-proofing returns.

ESG initiatives feature increasingly in company narratives, with British American Tobacco demonstrating measurable progress on harm reduction and responsible marketing. M&A or portfolio rationalisation—hallmarks of BAT’s agile strategy—may further unlock value. Meanwhile, a favourable regulatory environment for risk-reduced products and resilient demand for premium brands position the company to capture latent sector growth, even as it responds proactively to evolving consumer and legislative trends.

Investment strategies

For short-term traders, British American Tobacco presents attractive volatility and well-defined technical pivots (support at 3,341p, resistance at 3,629p), with the MACD and moving averages providing bullish confirmation. News-driven spikes, such as dividend declarations or regulatory updates, can offer profitable entry and exit points for those able to capitalise on such catalysts.

Medium-term investors benefit from the group’s strategic focus on new growth markets, continued return of capital through dividends and buybacks, and momentum in new categories. The stock’s valuation remains reasonable relative to its sector, especially when factoring projected cash generation and forecast EPS growth.

For long-term holders, the compelling narrative incorporates a structurally attractive yield (6.94%), a clear pathway to a reduced-risk product majority, and a demonstrated ability to navigate sector headwinds. Growing ESG focus and established market leadership add an additional layer of conviction for investors seeking both steady income and future capital appreciation. Historically, British American Tobacco has delivered strong total returns in defensive market phases, and ongoing innovation gives the stock a unique optionality in global consumer trends. Ideal positioning appears to be at current technical support levels or in anticipation of further positive announcements, particularly in the context of upcoming earnings or major product launches in H2 2025.

Is it the right time to buy British American Tobacco?

Compiling the evidence, British American Tobacco stands out for its exceptional combination of yield, growth momentum, and adaptability in transforming market landscapes. Its share price has not only regained lost ground but initiated a new phase of bullish potential, reinforced by a strong technical and fundamental foundation. Key strengths include the high dividend yield, compelling valuation, consistent execution on transformation strategies, and a leadership position in both traditional and next-generation tobacco markets.

Looking forward, British American Tobacco seems to represent an excellent opportunity for investors who seek robust income streams, resilient earnings, and long-term participation in the secular shift towards reduced-risk products. With clear upward trends, abundant liquidity, and strategic catalysts on the horizon, the fundamentals justify renewed interest and point towards a potential further acceleration in value. For investors positioning for quality and future resilience, British American Tobacco may be entering a new bullish phase, aligning defensive strength with growth optionality.

In summary, British American Tobacco is a powerful contender in the consumer defensive sector, and the current backdrop of earnings stability, innovation, and technical momentum create the conditions for an attractive entry point for a broad range of investors convinced by sustainable returns and strategic vision.

How to buy British American Tobacco stock in the UK

Buying British American Tobacco stock online has never been simpler or more secure, thanks to regulated brokers in the UK. You can choose between two main methods: spot buying (owning shares outright) or trading Contracts for Difference (CFDs) for more flexible exposure. Each approach has its pros and associated costs, catering to different investor profiles and objectives. Read on for clear explanations and practical examples of each method—our broker comparison can be found further down the page.

Spot buying

A cash purchase means buying British American Tobacco shares to become a direct shareholder. You simply pay the share price plus a modest fixed commission per order—often around £4 to £10, depending on the broker.

Gain scenario

If the British American Tobacco share price is 3,507p (£35.07), you can buy around 28 shares with a £1,000 stake, including a typical brokerage fee of about £5.

If the share price rises by 10%, your shares are now worth £1,100.

Result: +£100 gross gain, i.e. +10% on your investment.

Trading via CFD

CFD trading lets you speculate on British American Tobacco’s price without owning the actual shares. You can use leverage (borrowed funds) to amplify your market exposure. With CFDs, you pay a spread (the difference between buy and sell price), plus potential overnight financing costs.

Gain scenario

You open a CFD position on British American Tobacco shares, with 5x leverage and a £1,000 investment. This gives you market exposure of £5,000.

If the stock rises by 8%, your position gains 8% × 5 = 40%.

Result: +£400 gain, on a stake of £1,000 (excluding fees).

Final advice

Before investing, always compare brokers’ fees, spreads, and available features—it can make a real difference in your returns. Your choice between spot buying and CFD trading should align with your investment goals and risk appetite; remember to review our detailed broker comparison further down this page for more insights.

Our 7 tips for buying British American Tobacco stock

The latest news about British American Tobacco

British American Tobacco shares rise 1.24% this week, outperforming FTSE 100 peers. On 3 July 2025, British American Tobacco stock closed at 3,507.00p, gaining 43.00p for the day. This upward momentum marks a 17.96% increase over six months and a 42.85% gain year-on-year, indicating resilient investor demand in the UK market even amidst sector volatility.

The company maintains sector leadership through UK-based innovation and premium brand strategies. British American Tobacco continues to drive product innovation from its London headquarters, supporting the launch of next-generation products like glo Hilo and Vuse Ultra. These advances serve the UK’s growing smokeless segment, aligning with domestic regulatory priorities and shifting consumer preferences.

Dividend strength remains a major attraction for UK investors, with near 7% yield secured for 2025. On its latest announcement, the company confirmed a 240p per share annual dividend, supporting a 6.94% yield. This is significantly above the FTSE 100 average and remains attractive to income-focused British portfolios, especially given the stock’s eligibility for ISAs and SIPPs.

Technical analysis highlights a bullish trend, with key signals turning positive in the past week. Recent technical evaluations show the stock above its 50-, 100-, and 200-day moving averages, and a MACD buy signal has been triggered. Market consensus reflects a “neutral to bullish” stance, supported by robust trading volumes exceeding 6.3 million shares on average in London.

British American Tobacco reaffirms steady UK market share amid ongoing regulatory clarity. The group reported consistent market share growth across major UK brands such as Dunhill and Pall Mall. Regulatory stability in the UK, including predictable tax policies and clear frameworks for next-generation tobacco products, continues to underpin corporate confidence and forward earnings visibility for analysts and investors alike.

FAQ

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.