British American Tobacco stock gets Goldman growth upgrade

Goldman Sachs upgraded British American Tobacco from Neutral to Buy on Monday, November 2, citing a clearer path toward sustained organic revenue growth. The brokerage also raised its 12-month price target from 5,200 pence to 5,600 pence, according to a Yahoo Finance report citing Investing.com.

British American Tobacco stock traded at 53.89 euros on Lang & Schwarz at 10:37 CET on Tuesday, November 10.

New Categories support the outlook

Goldman expects organic sales growth of about 4% in both 2027 and 2028. The forecast assumes resilient combustible sales and mid-teens growth in New Categories, which include nicotine pouches and vapour products. The brokerage said the improved outlook could justify a valuation of about 13.5 times expected 2027 earnings, compared with a multiple of 12 times cited in the report.

The United States remains central to the thesis because it generates more than 60% of BAT's operating profit. Goldman expects Velo Max nicotine pouches to expand their retail reach after reaching 44,000 outlets in October, while Vuse volumes had gained 20% through August in states with visible regulatory enforcement, according to the report.

Regional recovery remains important

Goldman expects the Asia-Pacific, Middle East and Africa region to return to growth from 2027 as weakness in Bangladesh and Australia becomes less significant. The bank forecasts medium-term operating profit growth of 5% to 6% and average earnings-per-share growth of 9% over five years, supported by debt reduction and faster share buybacks.

The upgrade does not remove execution risks. Goldman lowered its 2027 and 2028 earnings-per-share forecasts by 0.4% and 1.3%, respectively, citing revised industry assumptions and exchange-rate movements. It also highlighted adverse regulation, US Food and Drug Administration enforcement and authorization delays for New Categories as risks to the thesis.

December update is the next test

BAT's December 2026 trading update is the next scheduled catalyst identified in the analysis. Goldman expects the statement to show stronger second-half momentum, giving investors a direct test of whether the anticipated growth acceleration is appearing in the group's operating performance.

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