British American Tobacco Is Cutting 5,500 Jobs. How to Play the High-Yield Dividend Stock Here.

Tobacco and nicotine products seller British American Tobacco p.l.c. (BTI) has announced that it will cut 20% of its workforce, cutting about 5,500 jobs and moving approximately 3,500 roles to third-party firms. Affecting about 9,000 employees in total, the move is to pursue an AI-driven restructuring to reduce costs and boost profits.

However, these cuts do not affect the U.S., which is the company’s largest market. On the other hand, regulatory risks might be just around the corner. The Food and Drug Administration (FDA) has proposed a rule that would require foreign tobacco product makers to ​register their facilities and list products sold in the country. That would mean players like BTI would have to provide identifying details for each tobacco product, including nicotine strength, nicotine source, flavors, package type, and product dimensions.

As long-term smoking rates keep falling due to health reasons, BTI is trying to reconfigure its portfolio towards alternative tobacco and nicotine products. These include non-combustible, reduced-risk products (RRPs) such as vapor products, heated products, and modern oral products. BTI plans to reach 50 million consumers of its smokeless products by 2030 and speed up smokeless product growth so that these products account for at least 50% of revenue by 2035.

About British American Tobacco Stock

British American Tobacco is a global consumer goods company that makes and sells tobacco and nicotine products in many markets. Its operations span six continents and include offices, factories, tech hubs, and research and development centers. Founded in 1902, BTI runs an international business built around product innovation and a wide geographic reach. Headquartered in London, U.K., the company has a market capitalization of $133.9 billion. 

Investors have rewarded the stock with higher prices, driven by its share buybacks and confidence in its high-yielding dividend. Adding to this is the company’s growth outlook, especially in newer nicotine categories. 

Over the past 52 weeks, the stock has gained 30.4%, while it is up 9.1% year-to-date (YTD). BTI’s shares reached a 52-week high of $67.30 on May 14, but are down 8.2% from that level. 

On a forward-adjusted basis, BTI’s price-to-earnings (non-GAAP) ratio of 12.51 times is lower than the industry average of 15.10 times. 

British American Tobacco 2025 Results Highlight Strong Smokeless Momentum and Profit Resilience

For 2025, BTI’s revenue decreased by 1% year-over-year (YOY) to £25.61 billion ($33.95 billion), as a 2.3% growth in the U.S. was offset by a 10.9% decline in the APMEA region. The company’s profit from operations increased by 265% annually to £10 billion ($13.25 billion). However, adjusted for constant currency and the effect of the movement in the Canadian settlement provision, profit from operations grew 2.3% YOY to £11.63 billion ($15.42 billion). 

Last year, BTI added 4.7 million consumers (bringing the total to 34.1 million) to its smokeless brands. Revenue from new categories increased by 5.5% YOY to £3.62 billion ($4.80 billion), while smokeless revenue as a percentage of total revenue increased by 70 basis points to 18.2%. 

Wall Street analysts expect BTI’s EPS (on a diluted basis) to grow by 3.7% YOY to $4.81 for the current year, followed by an 8.5% increase to $5.22 in the next year. BTI also has a reputation as a dividend-paying stalwart, with a dividend history dating back to 1986. The annual forward dividend rate of $3.30 yields 5.34% on current prices. 

What Do Analysts Think About British American Tobacco’s Stock?

Last month, Jefferies analyst Andrei Anton Ionita reiterated a bullish “Buy” rating on British American Tobacco, while Faham Baig from UBS also reiterated a “Buy” rating in May. This shows that analysts still have faith in this consumer-defensive giant. 

BTI has been a stalwart on Wall Street, with analysts awarding it a consensus “Moderate Buy” rating. Of the 12 analysts rating the stock, a majority of eight analysts have rated it a “Strong Buy,” one analyst suggests a “Moderate Buy,” while two analysts are playing it safe with a “Hold” rating, and one analyst suggested a “Strong Sell.” The consensus price target of $68.92 represents an 11.58% upside from current levels. The Street-high price target of $72 indicates a 16.6% upside.   

Key Takeaways

Given BTI’s solid dividend and yield, strong analyst ratings, and its shift toward smokeless products, the stock might be a solid defensive play now despite its job cuts.