For those hoping that tobacco stock British American Tobacco (NYSE:BTI) would continue with its stock buyback operations, there’s good news today: it is indeed carrying on. That particular bit of status quo bought British American Tobacco some extra love from investors, who sent shares up modestly in Wednesday afternoon’s trading.
British American Tobacco reported that it had already bought back 300,000 ordinary shares of stock as of yesterday, March 26. Those shares will ultimately be canceled, leaving British American Tobacco with 2,234,385,416 shares issued and 220,522,014 shares held by the company’s treasury. The buyback effort was first announced about nine days ago, though it stems from a shareholder approval that took place back in April 2023.
Funding the Buyback
While a stock buyback is generally good news for a company—it reduces the number of shares in circulation and makes those that remain more valuable thanks to higher EPS numbers—this buyback got a little extra consideration from how British American Tobacco raised the cash to carry it out in the first place. Reports note that British American Tobacco is already planning to sell 436.85 million shares of Indian company ITC to fund this buyback.
Plus, in a strange move, British American Tobacco has joined in the UK’s fight to raise taxes on vape products. Given that British American Tobacco was seen not long ago trying to push vape products, that may seem an odd move. But reports suggest that it’s more an effort to stop underage smoking and vaping in general, which could give the stock a leg up.
What Is the BTI Stock Forecast for 2024?
Turning to Wall Street, Joffrey Meller is the lone analyst tracking BTI stock in the past three months. With a Buy rating and a price target of $37.85 per BTI share, he expects the stock to climb over 25% from current levels.
