Value
6.7/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 7.7 |
| P/S | 6.8 |
| Fwd P/E | 9.0 |
| PEG | 5.0 |
| Analyst target | 5.0 |
- ▸Forward P/E: 11.9x
- ▸PEG: 1.54
BTI · Why this verdict
Why British American Tobacco Indus (BTI) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score5.3/10
ConfidenceMEDIUM
MacroRISK_OFF
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Profitability is strong, with margins of 25% and a Piotroski F-Score of 7/9, supporting a defensive franchise. Quality breakdown | Margins remain near 25% and the Piotroski score stays at 7 or higher. | →Stable |
| CounterDeclining smoking volumes and regulation could erode pricing power and compress margins even though current quality scores are high. | ||
At $61.52 the stock sits roughly 0.5% above the $61.22 analyst target, so the analyst view leaves no upside from here. Analyst target | Price stays near or below the analyst target, with no re-rating, over the next ~12 months. | →Stable |
| CounterAnalyst targets lag; a rising target or earnings upgrade could reopen double-digit upside from a defensive, low forward P/E name. | ||
Growth is weak: the growth score is 1.4/10 with earnings growth scoring 0.0 and revenue growth only 2.8. Components | Revenue and earnings growth stay low-single-digit over the next 12 months. | →Stable |
| CounterTobacco is a mature cash-generating business; low growth is expected and valuation (forward P/E 11.8x) already reflects it. | ||
The high yield is flagged as unsafe ('Yield trap warning: high yield but unsafe'), with earnings quality weak at 55% FCF/NI. Catalyst breakdown | Dividend safety stays low and cash conversion stays near 55% of net income. | →Stable |
| CounterTobacco cash flows are resilient and management has a long record of paying dividends, so the warning may overstate cut risk. | ||
Profitability is strong, with margins of 25% and a Piotroski F-Score of 7/9, supporting a defensive franchise.
→StableQuality breakdown
- Expectation
- Margins remain near 25% and the Piotroski score stays at 7 or higher.
CounterDeclining smoking volumes and regulation could erode pricing power and compress margins even though current quality scores are high.
At $61.52 the stock sits roughly 0.5% above the $61.22 analyst target, so the analyst view leaves no upside from here.
→StableAnalyst target
- Expectation
- Price stays near or below the analyst target, with no re-rating, over the next ~12 months.
CounterAnalyst targets lag; a rising target or earnings upgrade could reopen double-digit upside from a defensive, low forward P/E name.
Growth is weak: the growth score is 1.4/10 with earnings growth scoring 0.0 and revenue growth only 2.8.
→StableComponents
- Expectation
- Revenue and earnings growth stay low-single-digit over the next 12 months.
CounterTobacco is a mature cash-generating business; low growth is expected and valuation (forward P/E 11.8x) already reflects it.
The high yield is flagged as unsafe ('Yield trap warning: high yield but unsafe'), with earnings quality weak at 55% FCF/NI.
→StableCatalyst breakdown
- Expectation
- Dividend safety stays low and cash conversion stays near 55% of net income.
CounterTobacco cash flows are resilient and management has a long record of paying dividends, so the warning may overstate cut risk.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.5 |
| ROA | 3.4 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 3.3 |
| FCF quality | 4.3 |
| Moat | 6.5 |
| Rule of 40 | 3.0 |
| Piotroski F | 7.8 |
- ▸Strong margins: 25%
- ▸Earnings quality warning: 55% FCF/NI
- ▸Rule of 40: 15 (fail)
- ▸Strong Piotroski F-Score: 7/9
Growth
1.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.8 |
| EPS growth | 0.0 |
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.2 |
| Analyst rating | 7.6 |
| Price target | 7.2 |
- ▸Light analyst coverage (6.0) — signal dampened
Insider
5.0/10data confidence 50%Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 4.7 |
| growth rank | 2.0 |
Technical
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.7 |
| support resistance | 1.7 |
| 52w position | 8.6 |
| gap | 6.0 |
Risk (lower is worse)
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.9 |
| days to cover | 10.0 |
| volatility | 7.4 |
| put call | 0.0 |
| implied vol | 6.6 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 6.7 |
- ▸Elevated put/call: 2.86
- ▸Above max pain $30
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 2.2 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/0M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:100d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (0)
none
Reward-to-Risk
0.06
Upside
+0.8%
Downside
12.0%
Sizing output
AVOID
SetupMomentum Cont — Trend continuation, RSI 67, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.8>=5.5. Top dim: Sentiment at 7.0; weakest: Growth at 1.4. No conviction either direction.
The strongest dimensions are Sentiment at 7.0, Momentum at 6.8, and Value at 6.7; the weakest are Growth at 1.4, Peer rank at 4.0, and Technical at 4.8. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.06 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Price At Analyst Target
Trip ifAnalyst target rises above $70, more than 14% above the current $61.52 price.
- P2Weak Revenue Earnings Growth
Trip ifRevenue growth rises above 6% YoY for 2 consecutive quarters.
- P3Dividend Yield Trap Risk
Trip ifFCF to net income conversion rises above 85% from current 55%.
- P4Strong Margins Defensive Quality
Trip ifMargins fall below 15% from current 25%.