British American Tobacco’s Rally Reverses as Earnings and Headwinds Weigh – BTI Share Price JSE Down 12%
British American Tobacco’s stock has had a rollercoaster year, breaking historic resistance levels before retreating in September as...
Quick overview
- British American Tobacco's stock surged past R1,000 in 2025 but faced a 12.5% correction in September as investor sentiment shifted.
- The company's interim results showed an 8.2% revenue decline due to divestitures and currency pressures, despite growth in smokeless product users.
- BTIJ has initiated a share buyback program to support long-term value while dealing with challenges from the illicit cigarette trade in South Africa.
- Traders are closely monitoring the stock's performance around the 20-week simple moving average to assess the potential for a trend reversal.
British American Tobacco’s stock has had a rollercoaster year, breaking historic resistance levels before retreating in September as shifting strategies, buybacks, and mixed earnings shape investor sentiment.
Breaking the R1,000 Barrier
British American Tobacco (JSE: BTI) staged an impressive comeback in 2025, surging past R1,000 for the first time in years and reaching an August record peak of R1,040. This marked a nearly 100% rally from lows near R530 a year ago, fueled by market optimism around the company’s transition to smokeless products.
However, September brought a sharp 12.5% correction, pulling the stock back toward the 20-week simple moving average (SMA) — a long-standing support level. Investors are watching closely to see whether this key indicator will hold and spark another rebound.
BTIJ Chart Monthly – A New Record High Above 2016 Highs
Strategic Shifts Amid Market Headwinds
Despite its share price gains, BTIJ’s 2025 interim results disappointed, with reported revenue down 8.2% due to divestitures, currency pressures, and ongoing business transformation. On a constant-currency basis, revenue dipped 3.7%, while operating margins slid 9.7 percentage points to 34.5%, weighed down by higher amortization charges tied to U.S. Combustibles trademarks.
The New Categories segment, which includes smokeless alternatives, delivered 7.4% organic growth at constant rates and a 1.4 million increase in smokeless product users, bringing the total to 26.4 million. These gains underscore progress in diversification despite headline revenue falling 0.4%.
Buybacks and Structural Adjustments
As part of its ongoing share repurchase program, BTIJ recently bought back 127,591 shares from Banco Santander for cancellation. The move, approved by shareholders, is aimed at supporting long-term value and adjusting voting rights but could affect shareholder notifications under regulatory requirements.
In South Africa, the company continues to grapple with the illicit cigarette trade, which has cost the government R28 billion annually, more than the targeted increase in SARS collections. These pressures, combined with the lingering effects of the 2020 sales ban, have led to the loss of 200 jobs—around 30% of BTIJ’s local workforce since 2020.
Technical Pullback or Trend Reversal?
Technical Landscape: A Test of Support
BTI’s two-year rally has often bounced off the 20-week SMA, a key support level. After a sustained climb that carried the stock beyond its 2016 high just below R1,000, buying pressure persisted until late August. With September’s pullback bringing the price back to this trendline, traders are watching for signs of renewed interest at these levels to determine whether the uptrend can resume.
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