Shares of British American Tobacco (BATS.L) declined approximately 0.5% to 4,588 pence at the market open on Monday. This slight retreat came after the company filed a regulatory notice detailing its latest share repurchase activity.
Buyback Activity Continues
The tobacco giant disclosed it repurchased 131,297 ordinary shares on February 6 at a volume-weighted average price of 4,587.5114 pence per share. These shares are slated for cancellation, part of a broader buyback program initially announced in March 2024 and approved by shareholders in April 2025. Following this transaction, the company will have 2,176,273,303 ordinary shares with voting rights in issue.
While such buybacks are a regular feature for BAT and often support the share price, the market reaction was muted. The stock underperformed the FTSE 100 index, which advanced 0.4% to 10,407 points.
Investor Focus Shifts to Guidance
The timing is significant. With the company's preliminary full-year results for 2025 scheduled for release on Thursday, investor attention is firmly fixed on the future. Analysts and shareholders are less concerned with historic profits and more eager for management's outlook for 2026, particularly regarding cash flow, capital expenditure, and returns to shareholders.
BAT is recognized as one of London's consistent dividend payers, and buybacks have historically helped stabilize the stock ahead of earnings seasons. However, with the share price hovering near the upper end of its 52-week range—roughly 6% below its peak—some traders appear hesitant to push it higher without fresh positive catalysts.
The key risk for the sector remains pressure on cigarette volumes, regulatory challenges, and margin compression. Should CEO Tadeu Marroco and interim CFO Javed Iqbal strike a cautious tone regarding the 2026 financial year during Thursday's webcast, the market may quickly look past the buyback announcement.
Ultimately, for tobacco investors, the primary metrics are cash generation, pricing power, and the company's ability to balance shareholder returns with investments in next-generation nicotine products. Thursday's report will provide critical clarity on these fronts.
