2024-04-06 10:00:00 ET
Summary
- As a result of the dual pronged returns through (prospective) capital appreciation and dividend incomes, we are maintaining our Buy rating for the BTI stock here.
- This is on top of the first year of positive margins for the New Categories segment, further contributing to the growing Free Cash Flow generation and healthier balance sheet.
- BTI is notably lifting a page from MO's playbook, in selling the ITC stake to potentially resume its share repurchases, which has been relatively minimal since FY2022.
- As a result of its inherent undervaluation and recent raised dividends, we are maintaining our Buy rating for the BTI stock here.
We previously covered British American Tobacco p.l.c. (NYSE: BTI ) in January 2024, discussing the management's great success in renewing its tobacco portfolio, with the New Categories segment boasting an accelerated top-line growth well-balancing the secular decline of the conventional cigarettes segment.
With the worst of the secular decline baked in and the October 2023 bottom holding post-write-down, we believed that the discounted levels offered a highly attractive forward yield for dividend-oriented investors looking to buy and hold indefinitely....
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British American Tobacco: Rich Prospects Ahead, Given The Inherent Undervaluation And Profitable Smoke-Free