Quick verdict: BTI vs PM in 2026

In this BTI vs PM stock comparison for 2026, British American Tobacco (BTI) generally shows a strong edge in valuation and profitability metrics, while Philip Morris International (PM) exhibits superior revenue growth and analyst sentiment. BTI leads as the value and margin leader with a lower P/E and higher net margins, coupled with a higher dividend yield. PM takes the lead as the growth leader, boasting stronger revenue momentum and more optimistic price targets from analysts. Not investment advice.

BTI vs PM: key metrics side by side

Full side-by-side comparison of BTI and PM across valuation, profitability, growth and analyst sentiment. Data updated 2026-05-07.

BTI vs PM valuation comparison

When considering BTI vs PM valuation, British American Tobacco (BTI) appears significantly cheaper based on key metrics. BTI boasts a P/E ratio of 12.07x, which is almost half that of Philip Morris International (PM) at 23.9x. This indicates that investors are paying considerably less for each dollar of BTI’s earnings compared to PM. From a price-to-book perspective, BTI’s ratio stands at a positive 1.95x, while PM’s P/B is an unusual -28.58x, implying negative shareholder equity. This negative P/B for PM, coupled with a Debt/Equity ratio of -5.6x, suggests that PM’s liabilities exceed its assets, which can be a red flag for balance sheet health, despite the scorecard indicating it as a “win” in a numerical sense.

Furthermore, the discounted cash flow (DCF) models suggest a substantial upside for BTI, estimating a potential increase of +255.8% to a fair value of $207.67. In contrast, PM’s DCF model indicates a more modest upside of +22.4% to a fair value of $207.65. While both stocks have similar DCF fair values, BTI’s current price of $58.375 presents a much larger percentage difference from its intrinsic value according to this model, highlighting its profound undervaluation relative to PM. For investors prioritizing value, BTI’s lower P/E and remarkable DCF upside make it a compelling choice in the bti vs pm fundamentals and valuation discussion for 2026.

BTI vs PM growth comparison

In the bti vs pm growth comparison, Philip Morris International (PM) clearly demonstrates stronger momentum in revenue. PM reported a robust year-over-year revenue growth of +7.3%, reaching $40.65 billion. This contrasts sharply with British American Tobacco (BTI), which saw a slight decline in revenue growth at -1.0%, with total revenue of $25.61 billion. PM’s superior top-line expansion suggests a more dynamic market presence and success in adapting to evolving consumer preferences or expanding into new markets more effectively than BTI.

Despite PM’s stronger revenue growth, BTI generally exhibits more favorable profitability margins in several key areas. While PM leads in gross margin at 67.3% compared to BTI’s 61.35%, BTI outperforms PM in net margin (30.23% vs 26.74%) and EBITDA margin (48.99% vs 42.76%). This indicates that BTI is more efficient at converting revenue into operating and net profit. However, PM’s higher revenue base and growth trajectory could potentially lead to greater absolute earnings over time, even with slightly tighter margins. Investors focused on growth might favor PM, while those prioritizing operational efficiency might lean towards BTI in this bti vs pm stock comparison 2026.

BTI vs PM profitability

Examining BTI vs PM profitability, British American Tobacco (BTI) showcases superior performance in converting sales into profit. BTI’s net margin stands at an impressive 30.23%, outperforming Philip Morris International (PM) whose net margin is 26.74%. This higher net margin for BTI indicates that it retains more profit for every dollar of revenue generated after all expenses, including taxes, are accounted for. Similarly, BTI’s EBITDA margin of 48.99% is also healthier than PM’s 42.76%, reflecting better operational efficiency before accounting for depreciation, amortization, interest, and taxes.

When it comes to return on equity (ROE), both companies currently show “N/A%”, making a direct comparison impossible with the provided data. However, free cash flow (FCF) yield offers another insight into cash generation. BTI boasts a higher FCF yield of 4.7% compared to PM’s 4.03%. This suggests that BTI generates a greater amount of free cash flow relative to its market capitalization, which is crucial for funding operations, reducing debt, or returning capital to shareholders. Therefore, in terms of overall profitability and cash generation efficiency, BTI appears to be the stronger performer, generating more cash from its operations per share outstanding than PM.

Analyst ratings: BTI vs PM

In terms of analyst sentiment for this bti vs pm stock comparison 2026, Philip Morris International (PM) garners a slightly more favorable outlook, particularly regarding potential upside. Out of 25 analysts covering PM, 68.0% have a “Buy” rating, aligning with a “Buy” consensus. These analysts have set a consensus target price of $187.6, which represents a positive upside of +10.5% from its current price of $169.7. This indicates that the majority of analysts believe PM’s stock has room to grow in the near to medium term.

British American Tobacco (BTI), while also having a “Buy” consensus, presents a different picture regarding price target upside. From 18 analysts, 66.7% recommend “Buy” for BTI. However, their consensus target price is $40, which implies a significant downside of -31.5% from its current price of $58.375. This divergence suggests that while analysts generally view both stocks positively, they see more immediate appreciation potential in PM and anticipate a potential correction for BTI’s stock price, despite its lower valuation multiples and higher DCF upside.

Should I buy BTI or PM stock in 2026?

Deciding whether to buy BTI or PM stock in 2026 depends heavily on an investor’s individual priorities and risk tolerance, considering their distinct strengths. For investors prioritizing growth, Philip Morris International (PM) presents a more compelling case. With a revenue growth rate of +7.3% year-over-year, PM clearly outpaces BTI’s -1.0%. This stronger top-line expansion suggests PM is better positioned for future market share gains and adapting to industry shifts, making it potentially more attractive for those seeking dynamic businesses with momentum.

Value investors, on the other hand, might find British American Tobacco (BTI) to be the superior choice. BTI trades at a significantly lower P/E ratio of 12.07x compared to PM’s 23.9x, indicating it is undervalued relative to its earnings. Furthermore, BTI’s discounted cash flow (DCF) model suggests a massive upside of +255.8%, dwarfing PM’s +22.4%. This deep undervaluation, combined with BTI’s higher net margin of 30.23% and FCF yield of 4.7%, positions it as a strong candidate for those looking for fundamentally sound companies at a discount.

For income-focused investors, BTI also holds an edge due to its higher dividend yield of 0.06% compared to PM’s 0.03%. While both are in a sector known for dividends, BTI offers a slightly better income stream based on current yields. However, it’s crucial to remember that past performance does not guarantee future results, and market conditions can change rapidly. This is not investment advice; always conduct your own thorough research and consider consulting a financial advisor before making any investment decisions.

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