British American TobaccoBTAFF -0.31%67 Interest Coverage is 6.88 as of Dec. 2025, which is 2% above its 10-year median of 6.76. GuruFocus rates BTAFF with a GF Score™ of 67/100 and a GF Value™ of $38.65 (Significantly Overvalued). The stock has 6 warning signs investors should review. Among 35 Tobacco Products companies, British American Tobacco ranks worse than 71.43% on this metric.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's
Operating Income
by its Interest Expense. British American Tobacco's
Operating Income
for the
six
months ended in Dec. 2025 was $8,822 Mil. British American Tobacco's Interest Expense for the
six
months ended in Dec. 2025 was $-1,282 Mil.
British American Tobacco's interest coverage for the quarter that ended in Dec. 2025 was 6.88.
The higher the ratio, the stronger the company's financial strength is.
The historical rank and industry rank for British American Tobacco's Interest Coverage or its related term are showing as below:
BTAFF'
s Interest Coverage Range Over the Past 10 Years
Min: 5.77 Med: 6.76 Max: 9.32
Current: 6.05
BTAFF's Interest Coverage is ranked worse than 71.43% of 35
companies
in the Tobacco Products industry
Industry Median: 10.9
vs BTAFF: 6.05
British American Tobacco (OTCPK:BTAFF) Interest Coverage Explanation
Ben Graham requires that a company has a minimum interest coverage of 5 with the companies he invested. If the interest coverage is less than 2, the company is burdened by debt. Any business slow or recession may drag the company into a situation where it cannot pay the interest on its debt.
Interest Coverage is an important factor when GuruFocus ranks a company's overage Financial Strength .
British American Tobacco Interest Coverage Related Terms
British American Tobacco Interest Coverage 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.
Note: For Interest Coverage, "No debt" indicates no long-term debt. An indication of "No Debt" does not necessarily mean that the company has no long-term debt obligations; it could be due to missing data in the quarterly or annual report. Use caution when interpreting this information.
BTAFF vs PM, MO, TPB: Interest Coverage Comparison
For the Tobacco subindustry, British American Tobacco's Interest Coverage, along with its competitors' market caps and Interest Coverage 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 Interest Coverage vs Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, British American Tobacco's Interest Coverage distribution charts can be found below:
* The bar in red indicates where British American Tobacco's Interest Coverage falls into.
British American Tobacco Interest Coverage Calculation
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
* 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.
British American Tobacco (BTAFF) has a Interest Coverage of 6.88 as of Dec. 2025. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on British American Tobacco and its competitors. This is near median its historical median of 6.76. Over the past decade, British American Tobacco's Interest Coverage has ranged from 5.77 to 9.32. According to the industry distribution chart, British American Tobacco ranks #25 out of 35 companies in the Tobacco Products industry, placing it in the top 71.4%.
Is British American Tobacco's Interest Coverage too high?
British American Tobacco's current Interest Coverage of 6.88 is near median its 10-year median of 6.76. Over the past 10 years, this metric has ranged from a low of 5.77 to a high of 9.32. The Tobacco Products industry median Interest Coverage is 10.90. British American Tobacco's value of 6.88 is 36.9% below this industry median. Based on the distribution chart, British American Tobacco ranks #25 out of 35 companies in the Tobacco Products industry, which is below the industry midpoint. 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 Interest Coverage compare to PM and MO?
According to the Tobacco Products industry distribution chart, British American Tobacco ranks #25 out of 35 companies for Interest Coverage. This places British American Tobacco in the lower half of its industry. The industry median Interest Coverage is 10.90. British American Tobacco's value of 6.88 is 36.9% below this benchmark. Historically, British American Tobacco's own Interest Coverage has ranged from 5.77 to 9.32 over the past decade. While the company's 10-year median is 6.76 vs. the industry median of 10.90, British American Tobacco has consistently been below 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 Interest Coverage for a Tobacco Products company?
The median Interest Coverage among Tobacco Products companies is 10.90, based on 35 companies in the industry. Companies in the top quartile (top 25%) have a Interest Coverage significantly above this median, while those in the bottom quartile fall well below. However, Interest Coverage should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. British American Tobacco's current Interest Coverage of 6.88 is 36.9% below 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 Interest Coverage mean?
A high Interest Coverage can signal that a stock is expensive relative to its fundamentals. Interest Coverage measures a company's capability to pay interest expenses on its debt. View historical data on British American Tobacco and its competitors. For the Tobacco Products industry, the median Interest Coverage is 10.90 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. British American Tobacco's current Interest Coverage is 6.88, which is near median its own 10-year median of 6.76. 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 $38.65, compared to a current price of $61.43 — trading 58.9% above its estimated fair value. The current Interest Coverage is 6.88, which is near median its 10-year median of 6.76 and 36.9% below the Tobacco Products industry median of 10.90. 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 Interest Coverage calculated?
Interest Coverage is calculated from a company's financial statements. For British American Tobacco (BTAFF), the current Interest Coverage is 6.88 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 58.9% above its estimated GF Value™ of $38.65.
GuruFocus considers British American Tobacco to be Significantly Overvalued.
Key valuation signals for BTAFF:
Interest Coverage: 6.88 (near median its 10-year median of 6.76)
GF Value™: $38.65 vs. price of $61.43 (58.9% above fair value)
Industry Position: 36.9% below the Tobacco Products median (#25 of 35)
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
Get the complete analysis for BTAFF
Interest Coverage is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
BTAFF has been successfully added to your 
