Investing.com -- British American Tobacco (NYSE:BTI) saw its shares tumble over 6% on Thursday following its full-year 2024 results and a cautious growth outlook for 2025.
Analysts at RBC Capital Markets flagged the company’s muted revenue projections and regulatory challenges as key factors contributing to the market reaction.
British American Tobacco reported organic revenue and operating profit growth in line with expectations for the 2024 financial year.
However, the company’s guidance for 2025 was weaker than anticipated, with projected revenue growth of approximately 1% at constant rates. This falls short of consensus estimates, which expected growth of around 2.8%.
The company cited increased excise taxes and value-added tax (VAT) in Bangladesh, along with new regulatory pressures in Australia, as headwinds for the upcoming year.
Additionally, cigarette volumes declined by 5% on an organic basis, outpacing the broader industry’s 2% decline. Market exits and supply chain disruptions in Sudan further compounded these losses.
Despite reaffirming its planned £900 million share buyback for 2025, investor sentiment remained negative. RBC analysts noted that the stock price already reflects the potential upside from buybacks, limiting any immediate recovery prospects.
“We note the performance is expected to be second half weighted as the company deploys its innovations throughout the year,” RBC said.
However, with the global tobacco industry projected to see a continued volume decline of 2% year-over-year, the company’s ability to navigate these pressures remains in focus for investors.