BATS slides over 2% as shares trade below key moving averages

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British american tobacco slides 2.26% today

Highlights

British American Tobacco declares a quarterly dividend of 0.8349 per share, offering an annualized yield of 5.4%.
Dividend payments remain well covered by current earnings, despite ongoing selling pressure in the stock price.
Technicals signal short-term weakness but a longer-term bullish structure, with price expected to consolidate between GBX4,463 and GBX4,649 over the next five days.

Dividend yield overshadows stable payout as selling pressure lingers

British American Tobacco plc announced a quarterly dividend, with the ex-dividend date scheduled for July 10, 2024. Shareholders of record will receive a payment of 0.8349 per share on August 19, 2024. The annualized dividend yield is reported at 5.4%, and current earnings cover dividend payments. The company manufactures and sells cigarettes and tobacco products under brands such as Dunhill, Lucky Strike, Pall Mall, Kent, and Rothmans, though price action has remained under broader selling pressure.

Anton Kharitonov, expert at Traders Union, sees British American Tobacco trading below key short-term moving averages. He highlights that the recent price decline, despite a stable dividend payout, indicates ongoing market skepticism and lack of strong buying conviction. Weakness is amplified by mixed technical signals and continued selling pressure, even as the dividend yield remains attractive. Kharitonov remains critical, noting that the attempted intraday recovery could be short-lived without a broader shift in sentiment. "Despite the dividend news, I see little to offset persistent downside risks for BATS at this stage."

Viktoras Karapetjanc, expert at Traders Union, views the high dividend yield and coverage as supporting the company’s robust fundamentals. He notes that, despite short-term volatility, the stock remains above its 200-day average — suggesting the bullish structure is intact. Karapetjanc believes steady earnings and strong brands will drive further growth after near-term consolidation. "The market offers multiple setups here, and I expect upward momentum for BATS once short-term pressure fades."

Jainam Mehta, market strategist, observes a mixed technical outlook for BATS. The split between MACD’s bullish signal and other neutral or bearish oscillators creates uncertainty and opportunity for tactical traders. Mehta sees potential for a quick move if price breaks the GBX4,521 resistance or falls below GBX4,473 support. "There’s room for a contrarian entry on a decisive breakout either way — keep stops tight and watch for volatility spikes."

Mixed momentum and narrowing range as technical bias diverges

BATS trades below the 20-day (GBX4,588) and 50-day (GBX4,578) moving averages, but stays above the 200-day (GBX4,313), suggesting ongoing short- and medium-term weakness within a longer-term bullish bias. Immediate support is seen at GBX4,473 and resistance at GBX4,521. Momentum signals are mixed: MACD flashes a strong buy, while the ADX points to a fading trend. The RSI and CCI are neutral, Stochastic RSI suggests selling pressure, and BBP indicates buyers hold intraday momentum but warns of overbought conditions. The stock closed at GBX4,507 after an opening gap lower, nearing the day's high amid early selling and subsequent buyer attempts to push higher. A split between the bullish MACD and more neutral or bearish oscillators highlights uncertainty.

Earlier, analysts noted that British American Tobacco faced continued selling pressure despite stable dividend coverage and a supportive long-term technical structure. The current environment reinforces the importance of monitoring whether BATS can sustain support above GBX4,473, as a breakdown could shift sentiment and expose the stock to further downside risk.

Source of Data: BATS Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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