LONDON -- It's always worth keeping an eye on the earnings forecasts for your favorite companies, especially if you use forward P/E ratios to gauge when to buy and sell your shares. You never know; if City brokers have been revising their projections of late, your investments may not be as cheap -- or expensive -- as you think!

Today I'm looking at the earnings-per-share forecasts for British American Tobacco (LSE: BATS.L) (NYSE: BTI), the FTSE 100 cigarette maker. All my figures are courtesy of S&P Capital IQ.

The consensus for 2012 is for EPS of 207 pence, which puts the 3,252 pence shares on a forward P/E of 15.7. The estimates suggest earnings may rise to 226 pence per share for 2013 and climb to 247 pence for the year after that. EPS may then rise further to 274 pence, and then to 304 pence in 2016, according to City analysts.

The data from S&P Capital IQ also indicates British American Tobacco's revenue may climb from 15.4 billion pounds in 2012 to 16 billion pounds in 2013. It may then continue to rise for the next three years after that. The outlook for both revenue and earnings for British American Tobacco looks relatively healthy for the next few years. But then again, that P/E of around 16 might imply that the market is already expecting the shares to deliver accordingly.

Whether these projections make British American Tobacco a buy, a hold, or a sell is, of course, up to you, especially given that the share is more expensive than the FTSE, which at 5,786 trades on a P/E of 11.4.

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