Broker snap: BATS to gain momentum in 2011

25th Feb 2011 11:04

Even though volumes at British American Tobacco (BATS) were down in 2010, Nomura likes the 2011 outlook and stays positive on the tobacco giant.The Japanese broker says that second half volumes (-4%) were always going to be volatile given tax hikes in Japan and the Pakistan uncertainty, due to the floods."Both these markets will support 2011 (as will lapping of weak volumes in Turkey and Romania and improving trends in Russia)," says analyst David Hayes."[BATS] demonstrated: better pricing in the second half; ongoing margin development; outlined improving volume trends; and provided a buyback whilst maintaining flexibility for M&A."The broker stays with a 'buy' rating and confirms a target price of 2,800p.