British American Tobacco (BATS) was performing well on Monday on the back of an upgrade by Deutsche Bank.

The broker lifted its recommendation for the stock from 'hold' to 'buy' today and hiked its target price from 3,200p to 3,300p.

In an research report to clients, the bank said: "Whilst Imperial Tobacco [IMT], where we see signs that an increased focus on organic growth is starting to work, remains our top pick across European Tobacco names, we have upgraded our recommendation on BAT to 'buy' as we consider the current price a solid entry point to a high-quality stock."

Deutsche Bank said that the regulatory uncertainty over the course of 2012 weighed on investor sentiment about both companies last year. BATS gained just 2.1% last year while IMT fell 2.5%.

"Now that plain packaging is a fact in Australia, and the main elements of proposed EU changes are known, we think important overhangs should clear," the broker said.

BATS was up 1.1% at 3,209p in afternoon trade, while Imperial gained 0.5% to 2,454p.


Top performing sectors so far today
Tobacco 36,652.03 +0.93%
Banks 4,678.31 +0.60%
Financial Services 5,743.75 +0.33%
Mobile Telecommunications 3,745.65 +0.07%

Bottom performing sectors so far today
Industrial Metals & Mining 2,904.70 -1.99%
Gas, Water & Multiutilities 5,236.57 -1.91%
Industrial Engineering 8,413.76 -1.01%
General Industrials 3,544.76 -0.92%
Aerospace and Defence 4,072.15 -0.87%

BC

Related share prices
British American Tobacco (BATS) share price
Imperial Tobacco Group (IMT) share price