By Peet Serfontein & Mmamosa Khanye
We enter a long position with a target price of R1 060.00 and a stop-loss of R827.00.
British American Tobacco is one of the world's leading tobacco groups, with brands sold in more than 180 markets. The combustibles portfolio includes Dunhill, Kent, and Lucky Strike.
Headquartered in London, United Kingdom, BTI is transforming into a broader, multi-category nicotine business offering a consumer-centric brand portfolio that contains smokeless product brands Vuse, glo, and Velo. This forms part of the group's strategy centred on "Building a Smokeless World", with the ambition of becoming a predominantly smokeless business by 2035.
Technically, the price in a developing-top pattern makes the share an interesting candidate for a long position (see the diverging trendlines on the main chart) - the pattern is characterised by two diverging trendlines, with the share producing progressively higher swing highs and lower swing lows. This provides a tactical upside opportunity when the price trades near the lower boundary of the formation.
The price is also trading at the lower range of the De-trended Price Oscillator (DPO) indicator, supportive of the bullish underlying trend (see the insert). The indicator has fallen deeply below the zero line, showing that BTI is trading well below its underlying cyclical average and is approaching the lower end of its historical range. This suggests that the recent decline may be becoming extended with a confirmed bullish signal to come from improving price action, a rebound from the lower boundary of the broadening formation, and stronger momentum or volume indicators.
Fading downside momentum in the Moving Average Convergence Divergence (MACD) histogram supports the trade idea, with smaller negative bars signalling weakening selling pressure and improving momentum.
Share performance
Share information
| Share Code | BTI |
| Industry | Food, Beverage & Tobacco |
| Market Capital (ZAR) | 1901.2 billion |
| One-Year Total Return | 5.32% |
| Return Year-to-Date | -2.32% |
| Current Price (ZAR) | 881.10 |
| 52-Week High (ZAR) | 1 111.12 |
| 52-Week Low (ZAR) | 853.66 |
| Financial Year End | December |
| The price remains just below its 200-day simple moving average (SMA) at ~R936.23, which has been acting as major resistance. | |
Consensus expectations (Bloomberg)
| FY25 | FY26E | FY27E | FY28E | |
|---|---|---|---|---|
| Headline Earnings per Share (GBP) | 3.41 | 3.62 | 3.87 | 4.17 |
| Growth (%) | 6.17 | 7.08 | 7.75 | |
| Dividend Per Share (GBP) | 2.45 | 2.50 | 2.60 | 2.69 |
| Growth (%) | 1.98 | 3.96 | 3.66 | |
| Forward PE (times) | 11.05 | 10.32 | 9.58 | |
| Forward Dividend Yield (%) | 6.71 | 7.37 | 8.35 | |
| The company is set to deliver positive consistent earnings growth over the medium term with a robust pipeline of growth initiatives, particularly among the smokeless and reduced-risk product brands (Vuse, glo, and Velo). | ||||
Buy/sell rationale
Technical analysis:
Fundamental view:
Update on previous trade ideas
| Share Name and position | Entry | Current Price | Movement | Comment | Time to exit |
|---|---|---|---|---|---|
| LHC - Buy (Continue to hold) | 11.76 | 11.63 | -1.1% | Strong volume support and continued trading above the 200-day SMA remain encouraging. However, fading upside momentum presents a concern for the trade idea. We retain our R13.35 profit target, with a trailing stop loss at R11.35. | 9 November 2026 |
| CLH - Buy (Continue to hold) | 4.50 | 4.43 | -1.6% | Emerging price symmetry and improving momentum remain of interest. The price has crossed above its 200-day SMA, strengthening the bullish trade idea. We retain our R4.50 profit target, with a trailing stop-loss set at R4.25. | 11 January 2027 |
| JSE - Buy (Continue to hold) | 156.17 | 152.20 | -2.5% | A favourable 12-month AI price forecast, sustained trading above the 200-day SMA and positive price momentum support the trade idea. We retain our R171.00 profit target, with a trailing stop-loss at R150.00. | 1 December 2026 |
| CML - Buy (Continue to hold) | 43.21 | 42.11 | -2.5% | The possible development of Elliott Wave 5 remains of interest. However, the price remains below its 200-day SMA, and fading upside momentum presents a concern. We retain our R49.80 target, with a trailing stop loss at R40.90. | 26 October 2026 |
| SSW - Buy (Continue to hold) | 43.49 | 41.55 | -4.5% | The upside breakout from a falling-wedge pattern remains of interest. However, the price remains below its 200-day SMA, with fading upside momentum a concern. We retain our R56.80 target, with a trailing stop loss at R39.40. | 12 October 2026 |
| MTN - Buy (Continue to hold) | 199.31 | 183.77 | -7.8% | The possible early development of Elliott Wave 5 remains of interest. However, the price is trading below its 200-day SMA, with sudden downside momentum presenting a concern. We retain our R240.00 target and a R183.00 trailing stop-loss. | 23 November 2026 |
This trade idea can be action through FNB Local Trader by visiting shares.fnb.co.za.
