The British American Tobacco share price has done well in the past few years and is now hovering near its all-time high as demand for its products and its dividend rise. BAT was trading at 4,395p on Tuesday, a few points below the all-time high of 4,610p. Will BATS rise or fall after its earnings on Wednesday?
British American Tobacco share price rallies ahead of earnings
The BAT stock price has been in a strong uptrend in the past decades. It has soared from 70p in 2008 to the current 4,500p, bringing its market capitalization to over £133 billion, making it one of the biggest British companies today.
This surge has mirrored that of other tobacco stocks like Altria and Phillip Morris, even as the global tobacco consumption has continued falling in the past few years.
The next important catalyst for the BAT share price will be the upcoming financial results on Wednesday. These results will provide more color on the business, especially the progress in the United States.
The most recent results showed that BAT’s revenue rose by 1.8% in the first half of the year to over £12 billion. This growth happened as the new category revenue rose to over £1.65 billion, while its operating margin remained flat at 42%. The results were much higher than its guidance.
The management cited the strong positioning in the US combustibles and modern oral business, which has continued doing well in the past few months. This category has some of the highest margins in its business, a growth trend that will continue in the foreseeable future.
The combustibles business also did well, with the revenue rising to over £9.93 billion from £9.8 billion.
At the same time, the management has focused on savings in the past few months and was on track to save over £1.2 billion. Its new commitment is to save about £2 billion from 2026 to 2030.
Management is optimistic about growth
In a recent report, the management predicted that its full-year revenue will grow by 2%, with the new category segment growing by double digits, helped by Velo. Its report showed that Velo’s market share jumped by 460 basis points to 16%. Vuse has also done well, helped by US authorities who are tackling illegal sales. The CEO said:
“Recent Vuse volume and revenue improvement in the U.S. is encouraging, although the Vapour category continues to be impacted by illicit proliferation. We believe Vuse is well positioned to benefit from stronger Federal and state-level enforcement.”
BAT share price technical analysis
The weekly timeframe chart shows that the BAT stock price has been in a strong relentless bull run for years. It soared from a low of 1,858p in 2024 to the current 4,400p.
The stock has moved above the important resistance level at 4,000p. It also jumped above all moving averages, a sign that bulls are in control. It also remains above the Supertrend indicator.
The risk, however, is that the stock has formed a bearish engulfing pattern, which is a common reversal sign. Therefore, it may retreat to the key support level at 4,200p and then resume the uptrend. On the other hand, a move above the all-time high of 4,613p will invalidate the bearish outlook.
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