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On Wednesday, JPMorgan analysts reaffirmed their Overweight rating on BT Group (LON:BT) stock, maintaining a price target of £2.86. Currently trading at $1.73, InvestingPro analysis indicates the stock is fairly valued. The analysts highlighted several factors contributing to their positive outlook on the company, supported by BT’s strong financial health score of 2.91 (GOOD).
BT Group’s stock has shown a 5.36% increase year-to-date, with an attractive P/E ratio of 7.05 and a substantial dividend yield of 6.85%. Analysts pointed to a series of potential catalysts that could support further growth, including impressive revenue growth of 12.4%. They recently conducted a roadshow in London, which reinforced their belief that the company’s March 2026 guidance is prudent and that trends are expected to improve throughout the year. With earnings scheduled in 5 days, InvestingPro subscribers can access detailed financial forecasts and additional insights.
The analysis also suggested that BT’s retail and wholesale competitors are facing financial distress, potentially leading to significant in-market consolidation. This development could benefit BT Group, offering a competitive advantage in the market.
Additionally, with the normalization of fiber spending, BT Group’s earnings per share and equity free cash flow are expected to grow, providing the company with the opportunity to return up to £10 billion to shareholders over the next six years. This amount represents 60% of the company’s market capitalization.
The analysts see BT’s decade-end equity free cash flow target of £3 billion as conservative, with potential to reach £3.5 billion or even £4 billion under favorable conditions. As a result of these positive factors, BT Group has been added to JPMorgan’s Analyst Focus List, replacing Cellnex.
In other recent news, BT Group Plc has experienced mixed analyst sentiments regarding its stock. Morgan Stanley (NYSE:MS) analysts maintained an Overweight rating with a price target of GBP2.40, despite projecting a 2% revenue decline and flat EBITDA for the current year. They foresee a more promising outlook for FY27, with a 33% surge in free cash flow and a 1% increase in EBITDA. The firm noted BT Group’s progress in expanding fiber connectivity, which is expected to cover 80% of UK homes by March next year, potentially reducing future capital expenditures.
Conversely, Deutsche Bank (ETR:DBKGn) downgraded BT Group’s stock from Hold to Sell, setting a lower price target of GBP1.40. This decision was influenced by BT’s recent stock performance, which has outpaced the SXKP index, and concerns over intensified market competition. Deutsche Bank highlighted challenges such as line losses at Openreach and limited market recovery potential. The analysts also pointed out that the current share price is 20% above their target, prompting the downgrade. These developments reflect differing perspectives on BT Group’s future amid evolving market conditions.
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