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British American Tobacco Ups 2026 Guidance for Pouches, Vapes as Combustible Market Share Dwindles

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British American Tobacco Ups 2026 Guidance for Pouches, Vapes as Combustible Market Share Dwindles

British American Tobacco (BATS.L, BTI.JO) upgraded its 2026 growth guidance for new categories even as its value share in top markets declined, according to a first-half pre-close trading update on Tuesday.

The combustible market share of the tobacco company fell 20 basis points in value and 30 basis points in volume, amid a worsening outlook for the global cigarette industry. The company now expects global volumes to be down 2.5% in 2026, compared with previous expectations of a 2% decline.

However, with both Velo nicotine pouches and Vuse vapors gaining share, British American Tobacco raised its full-year revenue growth forecast for the new categories segment to mid-teens from the previous low double-digit expectation.

The company's stock was down over 3% in early morning trade.

Across the whole group, growth guidance for the medium term was reiterated in the range of 3% to 5% for revenue, 4% to 6% for adjusted profit from operations, and 5% to 8% for adjusted diluted EPS, with 2026 performance still expected at the lower end of these ranges.

Additionally, management disclosed that group adjusted profit from operations for 2026 will be weighted to the second half, led by stabilizing performance in Asia-Pacific, the Middle East, and Africa and the growing realization of Fit2Win savings.

"While we think that the shares are discounting the volume benefit from increasing new category sales, we don't believe that the adverse margin mix is properly appreciated," RBC Capital Markets said in a quick-take note.

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