Barclays cuts BT Group stock rating, lowers price target to £1.50

On Monday, Barclays (LON:BARC) analyst Mathieu Robilliard adjusted the firm’s stance on BT Group Plc (LON:BT/A:LN) (NYSE: BT), downgrading the stock from Equalweight to Underweight and reducing the price target from £1.90 to £1.50. The revision reflects concerns about the company’s market share, with expectations of losses in both the retail and wholesale segments.

Robilliard’s analysis suggests a valuation for Openreach, BT’s digital network business, at £27 billion, which is approximately 6.6 times the forecasted FY26 enterprise value to EBITDA ratio. This valuation is notably lower than the multiple paid for Telecom Italia (BIT:TLIT)’s NetCo last year. The downgrade is based on the anticipation of significant market share erosion, as competitors such as CityFibre, TalkTalk, and VM02 are expected to target Openreach’s wholesale customers.

Barclays has also made a slight downward revision to BT’s forecasted FY26 group EBITDA, setting it at £8.23 billion, which is roughly 1% lower than previous estimates and about £100 million below the company consensus. Additionally, the firm’s projections for FY26 are relatively flat compared to FY25, raising questions about BT’s medium-term guidance for FY27 through FY30. Barclays’ estimates for FY27 are £200 million below the company’s guidance, while the consensus aligns with the company’s outlook.

In terms of valuation, BT is seen as broadly in line with the sector, with an equity free cash flow yield of 8.1% expected in March 2026, an EV/OpFCF multiple of 12.7x, and an unlevered free cash flow yield of 5.9%. These figures are compared with European incumbent peers, which are projected at 7.4% equity free cash flow yield, 11.9x EV/OpFCF, and 5.9% unlevered free cash flow yield, respectively. The new price target reflects these considerations and the competitive pressures facing BT Group.

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