(Reuters) - British American Tobacco's BATS.L efforts to shift away from the status quo of a traditional tobacco company and to quicken decision making won the company a rare double upgrade from Bank of America Global Research.

FILE PHOTO: Pall Mall cigarettes are piled during the manufacturing process in the British American Tobacco Cigarette Factory (BAT) in Bayreuth, southern Germany, April 30, 2014. REUTERS/Michaela Rehle/File Photo

The brokerage raised its rating to “buy” from “underperform” - its first-ever double upgrade for BAT - citing reduced near-term U.S. regulatory risk and a more favorable competitive vaping environment for the Newport and Dunhill cigarette maker.

“The company is taking the right actions, shifting away from the status quo of a traditional tobacco company, recognizing the challenges faced in NGPs (new generation products) and implementing the right strategic decisions to compete more eﬀectively in the new fast-evolving world of tobacco,” analyst Mirco Badocco wrote in the note.

BAT’s shares rose as much as 5% to 3,198 pence in morning trading after BofA also raised its share price objective to 3,400 pence from 2,500 pence.

Badocco also cheered Chief Executive Officer Jack Bowles’ moves to slim down the company, including removing duplicate processes and 20% of its senior managers and consolidating brands within its new generation products (NGP) portfolio of e-cigarettes and heat not burn vaping products.

“If implemented in the right way...all of this has a big potential to make BAT much more agile and faster in decision making, which has been a key drag for the company in the fast-changing world of NGPs,” Badocco said.

Tobacco companies have made huge bets on e-cigarettes to counter declining sales of traditional cigarettes, but alarm bells have been raised over their safety following a spate of vaping-related lung injuries and deaths in the United States.

However, the health fears have made the competitive environment more favorable for BAT, the brokerage said, as rivals such as Altria-backed Juul, which have held a strong lead over BAT for years, scale down marketing investments.

BAT would also see near-term benefits from the U.S. Food and Drug Administration’s moves to delay its decision to reduce nicotine levels and ban menthol cigarettes for at least the next 12 months as it focuses on curbing the vaping crisis.

A ban on menthol products, especially, would be damaging for BAT as it controls 55% of the U.S. menthol market from which it makes 60% of its U.S. revenue, Badocco said.

The current average analyst rating on the stock is “buy,” with a median analyst price target of 3,600 pence, according to Refinitiv data.