British American Tobacco Forecasts 2018 Earnings Boost From New U.S. Tax Rules

While there are those who continue to debate the impact that the new U.S. tax laws put into place by the Trump administration will have on the economy, corporations, and individuals, British American Tobacco (BAT) is forecasting a win as it predicts a 6 percent earnings boost for its shares this year.

An analyst with global banking investment firm Jefferies reportedly estimated this 6 percent gain to equate to approximately $541 million.

The tobacco giant, which owns such conventional cigarette brands as Dunhill and Lucky Strikes, is increasingly active in the vaping industry as it continues to develop, sell, and launch smoke-free alternatives like their Glo, a heat-not-burn (HNB) product that the company first launched in Japan – a country where regulations have effectively banned electronic cigarettes within its borders, giving way to the rise of HNB products.

While vaping increases in popularity in many countries the world over, the biggest market is undoubtedly the United States. In the U.S., with rising interest in smoke-free alternatives to cigarettes, regulators have increasingly set their sights on the industry. In some areas, taxes on such products have an increased and in others, bans on their use in outdoor public spaces have gone into effect.

As for what BAT plans to do with the additional wealth generated by changes to the U.S. tax code, Reuters reports that the company intends to reinvest it into the vaping arm of their company. In light of a noticeable decline in cigarette sales in many countries, the move seems nothing short of logical.

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