British American TobaccoBTAFF -0.31%67 Gross Margin % is 83.42% as of Dec. 2025, which is 1% above its 10-year median of 82.90. GuruFocus rates BTAFF with a GF Score™ of 67/100 and a GF Value™ of $36.04 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 47 Tobacco Products companies, British American Tobacco ranks better than 97.87% on this metric.
BTAFF's Gross Margin % is ranked better than 97.87% of 47
companies
in the Tobacco Products industry
Industry Median: 33.29
vs BTAFF: 83.50
British American Tobacco had a gross margin of 83.42% for the quarter that ended in Dec. 2025 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for British American Tobacco was -0.10% per year.
British American Tobacco (OTCPK:BTAFF) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
British American Tobacco had a gross margin of 83.42% for the quarter that ended in Dec. 2025 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
British American Tobacco Gross Margin % Related Terms
British American Tobacco Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Tobacco subindustry, British American Tobacco's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
British American Tobacco Gross Margin % vs Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, British American Tobacco's Gross Margin % distribution charts can be found below:
* The bar in red indicates where British American Tobacco's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
British American Tobacco (BTAFF) has a Gross Margin % of 83.42% as of Dec. 2025. Gross margin is the ratio of total gross profit to net sales. View historical data on British American Tobacco and its competitors. This is near median its historical median of 82.90. Over the past decade, British American Tobacco's Gross Margin % has ranged from 73.58 to 83.95. According to the industry distribution chart, British American Tobacco ranks #1 out of 47 companies in the Tobacco Products industry, placing it in the top 2.1%.
Is British American Tobacco's Gross Margin % too high?
British American Tobacco's current Gross Margin % of 83.42% is near median its 10-year median of 82.90. Over the past 10 years, this metric has ranged from a low of 73.58 to a high of 83.95. The Tobacco Products industry median Gross Margin % is 33.29. British American Tobacco's value of 83.42% is 150.6% above this industry median. Based on the distribution chart, British American Tobacco ranks #1 out of 47 companies in the Tobacco Products industry, which is in the top quartile — a strong position relative to peers. Overall, British American Tobacco has a GF Score™ of 67/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does British American Tobacco's Gross Margin % compare to PM and MO?
According to the Tobacco Products industry distribution chart, British American Tobacco ranks #1 out of 47 companies for Gross Margin %. This places British American Tobacco in the top 2% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 33.29. British American Tobacco's value of 83.42% is 150.6% above this benchmark. Historically, British American Tobacco's own Gross Margin % has ranged from 73.58 to 83.95 over the past decade. While the company's 10-year median is 82.90 vs. the industry median of 33.29, British American Tobacco has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Tobacco Products company?
The median Gross Margin % among Tobacco Products companies is 33.29, based on 47 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. British American Tobacco's current Gross Margin % of 83.42% is 150.6% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on British American Tobacco and its competitors. For the Tobacco Products industry, the median Gross Margin % is 33.29 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. British American Tobacco's current Gross Margin % is 83.42%, which is near median its own 10-year median of 82.90. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is British American Tobacco stock overvalued right now?
Based on GuruFocus' analysis, British American Tobacco (BTAFF) is currently considered Significantly Overvalued. The stock's GF Value™ is $36.04, compared to a current price of $61.43 — trading 70.5% above its estimated fair value. The current Gross Margin % is 83.42%, which is near median its 10-year median of 82.90 and 150.6% above the Tobacco Products industry median of 33.29. British American Tobacco's overall GF Score™ is 67/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For British American Tobacco (BTAFF), the current Gross Margin % is 83.42% as of Dec. 2025. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is British American Tobacco (BTAFF) Overvalued in 2026?
Based on GuruFocus' analysis, British American Tobacco stock appears to be overvalued.
The current stock price of $61.43 is trading 70.5% above its estimated GF Value™ of $36.04.
GuruFocus considers British American Tobacco to be Significantly Overvalued.
Key valuation signals for BTAFF:
Gross Margin %: 83.42% (near median its 10-year median of 82.90)
GF Value™: $36.04 vs. price of $61.43 (70.5% above fair value)
Industry Position: 150.6% above the Tobacco Products median (#1 of 47)
No single metric tells the full story. See the BTAFF stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
The third-largest tobacco company by volume, British American Tobacco sold 465 billion cigarettes in 2025. Its leading brands are Dunhill, Kent, Pall Mall, Lucky Strike, and Rothmans in cigarettes. Its ownership of the Camel, Natural American Spirit, and Newport brands are limited to the US. In next-generation products, the company has the Vuse brand in vaping, Glo in heated tobacco, and Velo in modern oral tobacco. The company also owns a 22.9% stake in ITC limited, the largest Indian cigarette company.
67GF Score
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