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, according to a Yahoo Finance report based on Investing.com. The brokerage raised its 12-month price target to 5,600 pence from 5,200 pence.

Goldman expects BAT's organic sales growth to reach about 4% in both 2027 and 2028, moving toward the midpoint of management's 3% to 5% guidance range. The forecast follows four years of low-single-digit growth below that target and rests on resilient combustible tobacco sales and accelerating New Categories such as nicotine pouches and vapour products.

New Categories Drive The Outlook

Execution in the United States is central to the thesis. The market accounts for more than 60% of BAT's operating profit, while Velo Max reached 44,000 retail outlets in October after its September launch. Goldman expects a further expansion by January 2027 and also cited a 20% rise in Vuse vapour volumes through August in US states with observable enforcement.

The brokerage expects the Asia-Pacific, Middle East and Africa region to return to growth from 2027 as headwinds in Bangladesh and Australia ease on a comparative basis. It forecasts medium-term operating profit growth of 5% to 6%, average earnings-per-share growth of 9% over five years and annual free cash flow of about 9.5 billion pounds through 2030, above BAT's guidance of about 8 billion pounds.

The more positive rating does not remove execution risks. Goldman cut its earnings-per-share forecasts for 2027 and 2028 by 0.4% and 1.3%, respectively, citing updated industry assumptions and exchange-rate movements. Regulation, US Food and Drug Administration enforcement and delays in authorizing New Categories remain potential obstacles.

December Update Sets The Next Test

Goldman expects BAT's full-year 2026 trading update in December to show stronger second-half momentum. That release should give investors a fresh measure of New Categories adoption, regional performance and progress toward the group's organic growth target.

British American Tobacco stock traded at 54.32 euros on Lang & Schwarz at 10:42 CET on Wednesday, November 11, 2026.

European tobacco shares remain exposed to regulation, consumer trends and currency movements; the FTSE 100 provides the relevant broader market context for London-listed companies.

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