Barclays has kicked off coverage of British American Tobacco (LON:BATS) with an ‘overweight’ rating, arguing that the group is well-placed to exploit the new era of in the industry which will likely be marked by innovations such as e-cigarettes, Proactive Investors reports. The comments come after the tobacco maker recently updated investors on its half-year performance, saying that it remained confident on revenue from its next generation products.
BAT’s share price has been subdued in today’s trading, having given up 0.61 percent to 4,168.50p as of 14:21 BST. The decline is largely in line with losses in the benchmark FTSE 100 index which currently stands 0.77 percent lower at 7,682.27 points. The group’s shares have lost just under 15 percent of their value over the past year, as compared with a near four-percent rise in the Footsie.
Barclays ‘overweight’ on BAT
Barclays initiated coverage of BAT with an ‘overweight’ rating today and a price target of 5,000p on the shares. Proactive Investors quoted the analysts as saying in a note to clients that the global tobacco industry was “ushering in a new era of competitive disruption heralded by heat-not-burn in the east and e-cigarettes in the west,” pointing out that it believed that the tobacco maker was approaching the new era with a consistent strategy and a well-balanced geographical and product architecture.
Other analysts on tobacco maker
Societe Generale, which sees BAT as a ‘buy,’ set a price target of 4,800p on the company at the end of last month, while Credit Suisse, which rates the tobacco maker as an ‘outperform,’ hiked its valuation on the shares from 5,200p to 5,250p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average price target of 5,206.25p.