British American Tobacco p.l.c. (BTI) Stock Valuation — PE Analysis
Tobacco · NYSE
Current Price
$61.46
PE Ratio (TTM)
13.0x
Intrinsic Value
$80.8
+23.9% margin of safety
COMPETITIVE MOAT
↑Brand Loyalty and Pricing Power
Established brands like Dunhill command strong consumer loyalty. This allows BTI to pass on cost increases, maintaining profitability.
↑Distribution Network Scale
Extensive global distribution networks create significant barriers to entry. New entrants struggle to match BTI's reach and efficiency.
↑New Category Growth Potential
Rapid expansion of Velo nicotine pouches taps into younger demographics. This diversification offers a future growth engine beyond traditional cigarettes.
INVESTMENT RISKS
↓Declining Traditional Cigarette Volumes
The long-term secular decline of traditional cigarette smoking continues. BTI must offset this by growing its new product categories.
↓Intensifying Competition in Nicotine Pouches
The Velo nicotine pouch market is growing but also attracting significant competition. Maintaining market share will require sustained investment and innovation.
↓ESG and Public Health Concerns
Ongoing public health campaigns and ESG investor pressure create reputational and operational challenges. This can affect access to capital and consumer perception.
Base case
BTI base case PE valuation
At a current price of $61.46, the base case PE valuation puts BTI fair value near $80.8 per share. That figure assumes 8.4% yearly earnings growth, a target PE multiple of 13x, and a 10% discount rate.
Intrinsic Value
$80.8
Margin of safety
+23.9%
Expected annual return
+5.6%
Base case assumptions: 8.4% annual earnings growth, 13x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BTI PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for British American Tobacco p.l.c. respond.
Open PE Calculator for BTICompany Overview
British American Tobacco p.l.c. provides tobacco and nicotine products to consumers in the United States, Europe, Latin America, Canada, the Asia-Pacific, the Middle East, Central Asia, Caucasus, and Africa. The company offers vapour products; heated products, which consists of a battery-powered device and a plant-based substance consumable that is heated; modern oral products, such as nicotine pouches; combustibles, including cigarette sticks and other tobacco stick products; traditional oral products, such as snus and moist snuff; and fine cut/roll-your-own tobacco products. It sells its products under the Vuse, glo, Velo, Grizzly, Kodiak, Dunhill, Kent, Lucky Strike, Pall Mall, Rothmans, Newport, Natural American Spirit, and Camel Snus brands, as well as Vogue, Viceroy, Kool, Peter Stuyvesant, Craven A, and State Express 555 brands. The company distributes its products to retail outlets. British American Tobacco p.l.c. was founded in 1902 and is headquartered in London, the United Kingdom.
Financial Metrics — BTI PE Stock Valuation Data
PE Ratio (TTM)
13.0x
PEG Ratio
0.08
Earnings Yield
7.79%
ROE (TTM)
16.3%
Revenue/Share (TTM)
$11.76
Dividend Yield
5.31%
Debt/Equity
0.75x
Frequently Asked Questions
What is the PE ratio of BTI?
The trailing twelve-month PE ratio of BTI reflects how much investors pay per dollar of British American Tobacco p.l.c.'s earnings. This metric is most useful when compared to Tobacco peers and the company's own historical range.
Is BTI overvalued based on PE ratio?
BTI's PE of 13.0x combined with a PEG ratio of 0.08 provides a growth-adjusted perspective. A PEG below 1.0 means the P/E is low relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Tobacco, a DCF analysis may be more appropriate.
How do I value BTI stock using PE ratio?
To value British American Tobacco p.l.c. using PE: (1) Compare the current PE (13.0x) against the Tobacco median to assess relative pricing, (2) check the PEG ratio (0.08) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of BTI?
BTI's PEG ratio is 0.08, calculated by dividing the PE ratio (13.0x) by the expected earnings growth rate. A PEG below 1.0 means the P/E is low relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for BTI stock valuation?
PE ratio gives a quick relative read — how BTI is priced versus Tobacco peers. DCF provides an absolute value based on projected free cash flows. For BTI, with a strong ROE of 16.3%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See BTI DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Consumer Defensive valuationsP/E and DCF value BTI with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.