BTI
British American Tobacco p.l.c.
$60.47
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Fair Value
Trading 23.8% below fair value
You pay
$60.47
Bear
$65.36
Fair
$79.37
Bull
$93.38
Bear
$65.36
+8.1%
$4.67 × 14x P/E
Fair
$79.37
+31.3%
$4.67 × 17x P/E
Bull
$93.38
+54.4%
$4.67 × 20x P/E
Adjust Assumptions
17.0x
4.67$
Key Value Driver
Normalized P/E multiple (17x base case)
Implied Market Multiple
13.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$68.10
Divergence from AlphaVal
17%
Summary
Applying a 17x P/E to adjusted EPS of $4.67, the base-case value is $79.37 per share. DDM cross-check: $108.18.
Warnings
Dividend-based valuation: $108.18 (above our primary estimate by 36%). Large gaps may signal the dividend doesn't reflect full earning power.
Financial statements were converted from GBP into USD using GBPUSD at 1.3378 USD per GBP.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples