What happened

Shares of British American Tobacco (NYSE:BTI) tumbled 18.7% in July, according to data provided by S&P Global Market Intelligence, after the company cut full-year earnings guidance in June due to the global pandemic's impact on international travel.

So what

The market ignored several catalysts for growth that are open to the tobacco giant, preferring instead to focus on the near-term impact that the coronavirus will have on its business. British American said instead of seeing growth in the 3% to 5% range it previously forecast, its full-year outlook now calls for just 1% to 3% growth.

Man smoking a cigarette

Image source: Getty Images.

Now what

British American Tobacco should still benefit from smokers' reluctance to give up cigarettes, even though the industry remains in a secular decline. Because it also has popular new tobacco products on the market, such as its heat-not-burn glo brand along with more traditional e-cigarettes like Vuse, it should gain significant traction in the months ahead.

E-cig makers have only until next month to submit applications to the Food and Drug Administration for pre-marketing approval for their e-cigs, or else they face the removal of their products from store shelves.

British American is one of only three companies to have submitted an application, and most other competitors probably can't afford to. That means just a small number of companies would own almost the entire e-cig market.

The tobacco company is also working on a vaccine for COVID-19, a disease that smokers have a higher susceptibility to.