British American Tobacco downgraded to 'hold' amid weak core sales despite growth in new products.

British American Tobacco (BTI) has been downgraded from a 'buy' to a 'hold' due to weakening fundamentals and limited upside potential. While its new product categories like Velo and Vuse are gaining market share, the core combustible cigarette business continues to decline. Despite revenue growth, net income and EBITDA have fallen, prompting management to focus on cost-cutting and share buybacks. The stock's valuation is currently above preferred levels for a bullish outlook, with risks of further decline if performance worsens.