BTI Forecast



Bearish<—>Bullish



80% Confidence




Bullish Case: BTI shows potential for growth with strong adoption of non-combustible products; the term structure suggests decreased volatility, indicating market confidence in stability.




Bearish Case: Regulatory pressures and declining traditional cigarette sales could hinder profitability despite reduced-risk product growth. Short-term volatility is elevated.




Potential Outcomes:
  1. Successful non-combustible adoption boosts growth (50%).
  2. Regulatory challenges and cigarette declines hamper growth (30%).
  3. Unexpected financial volatility (20%).




Trading Oracle: Consider a bullish put credit spread, selling the $37 put and buying the $35 put for March expiration. This capitalizes on current high implied volatility, provides a high reward-to-risk ratio with a 70% probability of profit. Exploit the mean-reverting price action and implied volatility backwardation.



January 24, 2025


British American Tobacco Forecast

BTI        British American Tobacco











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