BAT SHARES UNDERVALUED, SAY STOCK MARKET ANALYSTS

  BAT Industries Plc &lt;BTI.L> 1986 results,
  which were at the upper end of market expectations, showed the
  company was in a strong position and that its shares were
  probably undervalued, share analysts said.
      BAT shares were down at 524p in late afternoon trading
  after a previous 535p close. They touched a high of 538p
  earlier on news of a 19 pct rise in annual profits to 1.39
  billion pre-tax.
      Stock market analysts said today's generally weak stock
  market plus unwinding of positions after heavy buying of BAT
  shares in the run-up to the results caused the fall in the
  share price.
      "In the current market, people almost expect companies to
  beat expectations," said one analyst, adding that pretax profits
  of 1.35 to 1.40 billion stg had been forecast.
      BAT's 1986 figure of 1.39 billion stg compared with a 1985
  pretax profit of 1.17 billion.
      Brokers noted that BAT's shift away from its
  underperforming industries and the decreasing share of the
  tobacco portion of the group were seen as good signs.
      BAT Chairman Patrick Sheehy told a news conference that the
  tobacco sector of the company had declined to 50 pct from 74
  pct four years ago.
      Sheehy said he could see the tobacco portion of the company
  declining further as other sectors increased in importance.
      He said BAT was looking to expand in the area of financial
  services, in particular in the U.S.
      Sheehy also said the group had "no sizeable acquisitions" in
  sight in the near future.
      Analysts said BAT's increasingly good performance in the
  U.K. Insurance area was encouraging.
      Its declining debt-to-equity ratio of currently about 16
  pct also made it likely that BAT would soon be looking to make
  major acquisitions, they said.
  

