Tuesday preview: British American Tobacco, Palo Alto in focus

(Sharecast News) - Tuesday sees the release of a first-half pre-close trading update from British American Tobacco, half-year results from Paragon Banking and full-year results from GB Group. As far as BAT is concerned, UBS said it expects an inflection in performance from 1H26, and a FY26 guidance uplift.

"Our tracking of market data suggests BAT's strong momentum has continued in the US (59% of FY26E EBIT), where we expect organic sales growth of +7.6% in 1H26 (with pouches +230% and vapour +15%)," the bank said.

"Whilst this is partially offset by a likely decline in heated tobacco (-4.7% driven by Japan) and international vapour (-15%), BAT could deliver an inflection in group organic sales growth to +3.8% in 1H26E (cons +3.3%), with New Categories growth of +19% (cons +16%).

"We expect 1H26 organic EBIT growth of +3.5% (cons +3.6%) and EPS growth +2.7% to 160p (cons 159p), including -3.0% headwind from FX."

Consequently, UBS said it sees an opportunity for BAT to raise FY26 top-line guidance at the half-year stage, even before the potential second half sell-in of new vapour products in the US.

"Driven by US vapour - which is partly offset by softer heated tobacco growth, lower associate income, and repurchasing shares at a higher price - we raise outer year earnings per share estimates by circa 1%," it said.

In the US, quarterly results are due from Palo Alto Networks, Dollar General and Ulta Beauty.

On the macroeconomic front, UK mortgage approvals, net lending and consumer credit data for April will be released at 0930 BST, while preliminary eurozone inflation figures for May are due at 1000 BST.