BAT share price dips as group flags currency hit to earnings

Revenue from new generation products to miss expectations

BAT share price dips as group flags currency hit to earnings

Shares in British American Tobacco (LON:BATS) have fallen into the red in London in today’s session as the blue-chip group said that it expects currency headwinds to weigh on its earnings growth this year. The news comes after the FTSE 100 tobacco maker recently announced a change at the top.

As of 10:34 BST, BAT’s share price had given up 1.24 percent to 3,289.82p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.37 percent lower at 7,002.94 points. The group’s shares have given up just under 33 percent of their value over the past year, as compared with a near seven-percent drop in the Footsie.

BAT updates on recent performance

BAT updated the market on its recent performance this morning, ahead of analyst and investor meetings, noting in a statement that its full-year adjusted earnings per share growth is expected to be impacted by a currency translation headwind of around seven percent, assuming exchange rates remain unchanged for the remainder of the year.

The blue-chip group also said that its tobacco heating products and vapour revenue is expected to reach £900 million this year, down from a previous forecast of £1 billion, largely due to a reduction in planned year-end stocks in Japan and the effect of a recall of its Vuse Vibe vape kit in the US.

BAT’s outgoing chief executive Nicandro Durante commented in the statement that the group had  “a great pipeline of new product launches over the coming months,” while its “combustible tobacco business continues to perform well”.

Analysts weigh in on company

“The long-term investment case at BAT – and for the industry – is opaque compared with what we have come to expect from tobacco,” James Edwardes Jones, an analyst at RBC Europe who rates the stock underperform, wrote, as quoted by Bloomberg.

As of 10:43 BST, Tuesday, 16 October, British American Tobacco plc share price is 3,293.00p.

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