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As you might know, British American Tobacco p.l.c. (LON:BATS) recently reported its half-yearly numbers. It looks like the results were a bit of a negative overall. While revenues of UK£13b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 2.1% to hit UK£1.76 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on British American Tobacco after the latest results.
Check out our latest analysis for British American Tobacco
Taking into account the latest results, British American Tobacco's 17 analysts currently expect revenues in 2023 to be UK£28.0b, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 6.8% to UK£3.64 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£28.1b and earnings per share (EPS) of UK£3.62 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The analysts reconfirmed their price target of UK£35.57, showing that the business is executing well and in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on British American Tobacco, with the most bullish analyst valuing it at UK£47.00 and the most bearish at UK£27.50 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await British American Tobacco shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 1.7% annualised decline to the end of 2023. That is a notable change from historical growth of 2.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.8% annually for the foreseeable future. It's pretty clear that British American Tobacco's revenues are expected to perform substantially worse than the wider industry.