11 Best Counter Cyclical Stocks to Buy According to Analysts

5. British American Tobacco p.l.c. (NYSE:BTI)

Average Upside Potential: 11.74%

Number of Hedge Fund Holders: 25

British American Tobacco p.l.c. (NYSE:BTI) is one of the world’s largest tobacco companies, running a diverse product portfolio that includes traditional cigarettes, smokeless tobacco, and next-generation vaporizers and heated tobacco. The company owns iconic brands like Dunhill and Lucky Strike and operates globally in more than 180 countries. It leverages its strong distribution network, strict regulatory compliance, and harm-reduction strategies to remain competitive and maintain its market share. Demand for tobacco tends to remain stable regardless of economic conditions.

British American Tobacco p.l.c. (NYSE:BTI) delivered organic constant currency results in line with guidance in the recent quarter, with group revenue growing by 1.3% YoY. Smokeless products now account for 17.5% of group revenue, with 3.6 million new Smokeless consumers added in 2024, reaching a total of 29.1 million consumers. Given the intensifying regulatory pushback against traditional smoking, BTI has made significant progress to remain competitive through alternative smoking products. The company also demonstrated strong financial discipline with operating cash conversion exceeding 100% for the 5^th year and financial leverage trending down.

Looking ahead, British American Tobacco p.l.c. (NYSE:BTI) expects to deliver revenue growth of around 1% in 2025. The company faces significant headwinds in Bangladesh and Australia, which are expected to impact 2025 group revenue growth by 1%. Despite these challenges, management remains committed to returning to 3% to 5% revenue and growth by 2026, driven by an improving US financial performance, strong growth from Velo globally, and the launch of new innovations across the New Categories segment. BTI has historically had a low beta and showed significant resilience during previous bear markets, which makes it one of the best counter cyclical stocks to consider.