Why British American Tobacco Stock Was Moving Higher Today

Shares of British American Tobacco (NYSE: BTI) were gaining today after the global tobacco giant posted better-than-expected results for the first half of the year.

The stock was up 4.5% as of 2:19 p.m. ET.

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BAT tops expectations

Overall, British American Tobacco's (BAT) results were far from stellar, but the company still beat bottom-line estimates. The stock is cheap enough that investors will give it a boost on a decent earnings report, especially since most investors own the stock for its dividend.

BAT said organic revenue fell 0.8% in the first half, excluding the sale of its businesses in Russia and Belarus, finishing at 12.34 billion pounds (US$15.86 billion), slightly below estimates at 12.47 billion pounds (US$16.02 billion).

Revenue from new categories, a closely watched segment that includes smoke-free products like its Vuse vapes and Velo nicotine pouches, rose a modest 7.4%. Management said new category revenue was likely to miss its 5-billion-pound (US$6.4 billion) target in 2025 due to competition from illicit single-use vapor products in the U.S. and the sale of its Russia and Belarus businesses.

On the bottom line, adjusted organic profit slipped 0.9% to 5.57 billion pounds (US$7.16 billion). Adjusted earnings per share fell 2.1% to 1.69 pounds (US$2.17), better than estimates at 1.66 pounds (US$2.13).

CEO Tadeu Marroco expressed optimism about the second half of the year and beyond, saying, "Guided by our refined strategy, I am confident that we will progressively improve our performance to deliver 3-5% revenue, and mid-single digit adjusted profit from operations growth on an organic constant currency basis by 2026."

What's next for British American Tobacco

BAT maintained its full-year guidance with low-single-digit organic constant currency growth on an expected 2% global decline in tobacco volume. Even with today's gains, the stock's dividend is yielding 8.9%, and today's report shows that the dividend is reliable and the stock remains cheap.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends British American Tobacco P.l.c. and recommends the following options: long January 2026 $40 calls on British American Tobacco and short January 2026 $40 puts on British American Tobacco. The Motley Fool has a disclosure policy .