Key Morningstar Metrics for British American Tobacco
- : GBX 4,350Fair Value Estimate
- : ★★★Morningstar Rating
- : WideMorningstar Economic Moat Rating
- : MediumMorningstar Uncertainty Rating
On April 9, British American Tobacco BATS announced that Dragos Constantinescu would join the firm as CFO effective Sept. 1. His predecessor, Soraya Benchikh, left the company in August 2025.
Why it matters: The company made progress in 2025, turning around its US business (which accounted for 57% of 2025 adjusted operating profit), but it remains in a highly competitive environment for next-generation products. We think the selection of Constantinescu alleviates fears of disruption during this key period.
- We think Constantinescu has relevant experience and is a logical choice. He served for 16 years at BAT in various finance and management leadership roles and is currently CEO of Asahi Europe & International.
- Moreover, with CEO Tadeu Marroco remaining at the helm, we expect the current strategic direction to be unchanged. Leveraging the robust free cash flow from its sizable cigarette business, the company should continue to invest in heated tobacco, nicotine pouches, and vapes.
The bottom line: We maintain our fair value estimates for wide-moat BAT of GBX 4,350/USD 58 as well as our Standard Capital Allocation Rating. We do not expect a change to our forecast, including three-year adjusted operating profit growth of 5% per year, which is at the midpoint of BAT’s guidance.
- Shares look fairly valued to us after rallying more than 40% over the past year as the market has come to recognize the improvements in BAT’s US business. We’d recommend investors wait for a more attractive entry point.
