Broker snap: Recovery to reignite BATS

6th Jan 2010 11:07

The tobacco sector was overlooked in the 2009 recovery, according to Nomura, which has raised its rating on Lucky Strike maker British American Tobacco.The Japanese broker lifts its stance to 'buy' from 'reduce' with price target uppe dto 2,130p from 1,925p previously.It thinks that tobacco stocks, which are trading at about 11.5 times 2010 earnings, are at a discount to the market.More specifically, it believes BATS will benefit from recovery in emerging markets, fuelled by lower unemployment and input costs.Imperial Tobacco remains Nomura's top pick in the European tobacco sector.