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British American TobaccoCHIX:BATSL -0.84%73 Forward Rate of Return (Yacktman) % is 9.11% as of Dec. 2025, which is 3% below its 10-year median of 9.37. GuruFocus rates CHIX:BATSL with a GF Score™ of 73/100 and a GF Value™ of £31.48 (Significantly Overvalued). The stock has 2 warning signs investors should review. Among 33 Tobacco Products companies, British American Tobacco ranks worse than 57.58% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. British American Tobacco's forward rate of return for was 9.11%.
The historical rank and industry rank for British American Tobacco's Forward Rate of Return (Yacktman) % or its related term are showing as below:
CHIX:BATSl'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -2.36 Med: 9.37 Max: 29.53
Current: 9.11
During the past 13 years, British American Tobacco's highest Forward Rate of Return was 29.53. The lowest was -2.36. And the median was 9.37.
CHIX:BATSl's Forward Rate of Return (Yacktman) % is ranked worse than 57.58% of 33
companies
in the Tobacco Products industry
Industry Median: 9.4
vs CHIX:BATSl: 9.11
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
British American Tobacco (CHIX:BATSl) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
British American Tobacco Forward Rate of Return (Yacktman) % Related Terms
British American Tobacco Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for British American Tobacco's Forward Rate of Return (Yacktman) % can be seen below:
* 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 Forward Rate of Return (Yacktman) % Chart
CHIX:BATSL vs PM, MO, TPB: Forward Rate of Return (Yacktman) % Comparison
For the Tobacco subindustry, British American Tobacco's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % 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 Forward Rate of Return (Yacktman) % vs Tobacco Products Industry
For the Tobacco Products industry and Consumer Defensive sector, British American Tobacco's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where British American Tobacco's Forward Rate of Return (Yacktman) % falls into.
British American Tobacco Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* 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.
What does a Forward Rate of Return (Yacktman) % of 9.11% mean?
British American Tobacco (CHIX:BATSL) has a Forward Rate of Return (Yacktman) % of 9.11% as of Dec. 2025. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on British American Tobacco and its competitors. This is near median its historical median of 9.37. According to the industry distribution chart, British American Tobacco ranks #19 out of 33 companies in the Tobacco Products industry, placing it in the top 57.6%.
Is British American Tobacco's Forward Rate of Return (Yacktman) % too high?
British American Tobacco's current Forward Rate of Return (Yacktman) % of 9.11% is near median its 10-year median of 9.37. The Tobacco Products industry median Forward Rate of Return (Yacktman) % is 9.40. British American Tobacco's value of 9.11% is 3.1% below this industry median. Based on the distribution chart, British American Tobacco ranks #19 out of 33 companies in the Tobacco Products industry, which is below the industry midpoint. Overall, British American Tobacco has a GF Score™ of 73/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does British American Tobacco's Forward Rate of Return (Yacktman) % compare to PM and MO?
According to the Tobacco Products industry distribution chart, British American Tobacco ranks #19 out of 33 companies for Forward Rate of Return (Yacktman) %. This places British American Tobacco in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 9.40. British American Tobacco's value of 9.11% is 3.1% below this benchmark. While the company's 10-year median is 9.37 vs. the industry median of 9.40, 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 Forward Rate of Return (Yacktman) % for a Tobacco Products company?
The median Forward Rate of Return (Yacktman) % among Tobacco Products companies is 9.40, based on 33 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. British American Tobacco's current Forward Rate of Return (Yacktman) % of 9.11% is 3.1% 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 Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on British American Tobacco and its competitors. For the Tobacco Products industry, the median Forward Rate of Return (Yacktman) % is 9.40 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. British American Tobacco's current Forward Rate of Return (Yacktman) % is 9.11%, which is near median its own 10-year median of 9.37. 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 (CHIX:BATSL) is currently considered Significantly Overvalued. The stock's GF Value™ is £31.48, compared to a current price of £42.07 — trading 33.6% above its estimated fair value. The current Forward Rate of Return (Yacktman) % is 9.11%, which is near median its 10-year median of 9.37 and 3.1% below the Tobacco Products industry median of 9.40. British American Tobacco's overall GF Score™ is 73/100 with 2 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For British American Tobacco (CHIX:BATSL), the current Forward Rate of Return (Yacktman) % is 9.11% 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 (CHIX:BATSL) Overvalued in 2026?
Based on GuruFocus' analysis, British American Tobacco stock appears to be overvalued.
The current stock price of £42.07 is trading 33.6% above its estimated GF Value™ of £31.48.
GuruFocus considers British American Tobacco to be Significantly Overvalued.
Key valuation signals for CHIX:BATSL:
Forward Rate of Return (Yacktman) %: 9.11% (near median its 10-year median of 9.37)
GF Value™: £31.48 vs. price of £42.07 (33.6% above fair value)
Industry Position: 3.1% below the Tobacco Products median (#19 of 33)
No single metric tells the full story. See the CHIX:BATSL 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.
73GF Score
Get the complete analysis for CHIX:BATSL
Forward Rate of Return (Yacktman) % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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