Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The report indicates that the new tobacco business is progressing steadily, with guidance for double-digit growth in 2026 [2] - The company expects revenue growth of 4% in 2026, followed by 3% in 2027 and 2028, with net profit growth of 6%, 7%, and 5% respectively [8] Financial Summary - Total revenue (in million GBP) is projected as follows: 2024: 25,867; 2025: 25,610; 2026E: 26,634; 2027E: 27,433; 2028E: 28,256, with a year-on-year change of -5%, -1%, 4%, 3%, and 3% respectively [5] - Gross profit is expected to increase from 2,406 in 2024 to 11,906 in 2028 [5] - Net profit is projected to rise from 3,068 in 2024 to 9,246 in 2028, with significant growth in 2025 [5] - The PE ratio is forecasted to decrease from 43.03 in 2024 to 14.28 in 2028, indicating improved valuation [5] Market Performance - The stock has a 52-week price range of $36.35 to $63.22, with a current market capitalization of $132 billion [5] - The report highlights a recovery in the vaping business, with the VUSE brand returning to growth in the second half of 2025 [8] - The company is also focusing on new product launches in the heated tobacco segment, with expectations for improved market performance [8]

Investment Rating - The investment rating for the company is "Buy" [1] Core Insights - The report indicates that the new tobacco business is progressing steadily, with guidance for double-digit growth in 2026 [2] - The company expects revenue growth of 4% in 2026, followed by 3% in both 2027 and 2028, with net profit growth of 6%, 7%, and 5% respectively during the same period [8] Financial Summary - Total revenue (in million GBP) is projected as follows: 2024: 25,867; 2025: 25,610; 2026E: 26,634; 2027E: 27,433; 2028E: 28,256, with a year-on-year change of -5%, -1%, +4%, +3%, and +3% respectively [5] - Gross profit is expected to increase from 2,406 million GBP in 2024 to 11,906 million GBP in 2028 [5] - Net profit is forecasted to rise from 3,068 million GBP in 2024 to 9,246 million GBP in 2028, with year-on-year changes of -121%, +153%, +6%, +7%, and +5% respectively [5] - The price-to-earnings (PE) ratio is projected to decrease from 43.03 in 2024 to 14.28 in 2028 [5] Market Performance - The company's stock price has ranged between 36.35 and 63.22 USD over the past 52 weeks, with a current market capitalization of 132,002 million USD [5]

Financial Performance - HY25 total revenue reached £12567 million, a 18% increase compared to HY24 at constant rates[32] - New Category revenue grew by 24% to £1689 million[32] - Adjusted profit from operations increased by 19% to £5435 million, adjusted for Canada[32] - Adjusted diluted earnings per share (EPS) increased by 17% to 1621 pence, adjusted for Canada[32] New Categories - Smokeless products represent 182% of Group revenue, an increase of 70bps[28] - New Category contribution margin increased by 28 percentage points to 106%[28] - Velo Plus experienced strong volume share gains, up 87 percentage points from November 2024 to May 2025[89] Regional Performance - The U S saw a return to revenue and profit growth, driven by combustibles recovery and Velo Plus momentum[30, 46] - In the U S , Velo revenue grew by 384%[46] - Combustibles revenue in the U S increased by 38%[46] - APMEA was impacted by combustibles fiscal and regulatory headwinds, with a revenue decrease of 48%[52] Strategic Initiatives - The company increased its share buy-back program to £11 billion for FY25[28, 30] - The company is targeting >£12 billion in productivity savings from 2023-2025[59] - The company is aiming to generate >£50 billion in free cash flow by the end of 2030[69]