Tobacco · NYSE
Current Price
$57.45
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on British American Tobacco p.l.c. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
British American Tobacco p.l.c. provides tobacco and nicotine products to consumers in the Americas, Europe, the Asia-Pacific, the Middle East, Africa, and the United States. It offers vapour, heated, and modern oral nicotine products; combustible cigarettes; and traditional oral products, such as snus and moist snuff. The company provides its products under the Vuse, glo, Velo, Grizzly, Kodiak, Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport, Natural American Spirit, and Camel brands. The company distributes its products to retail outlets. British American Tobacco p.l.c. was founded in 1902 and is based in London, the United Kingdom.
ROIC (TTM)
8.1%
ROE (TTM)
16.3%
FCF Yield
4.73%
Based on trailing twelve-month data, BTI shows a free cash flow per share of N/A and a ROIC of 8.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 4.73% are important context metrics when evaluating BTI's stock valuation relative to peers.
The intrinsic value of BTI depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether BTI is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $57.45. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on British American Tobacco p.l.c.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Tobacco industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting BTI's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For British American Tobacco p.l.c., this means projecting how much free cash flow the Tobacco will produce over the next 5-10 years, then discounting those amounts to today's dollars. BTI's ROIC of 8.1% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For BTI, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
