Morgan Stanley has increased its price target for BT Group (BTGOF, Financial) from 225 GBp to 240 GBp, while maintaining an Overweight rating on the stock. BT Group has been elevated to Top Pick status, sharing this position with DT and Swisscom. According to an analyst's report, the anticipated increase in capital expenditures is expected to accelerate free cash flow growth as these expenses decrease significantly once BT completes its fiber network project.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for BT Group PLC (BTGOF, Financial) is $2.34 with a high estimate of $2.34 and a low estimate of $2.34. The average target implies an upside of 1.59% from the current price of $2.30. More detailed estimate data can be found on the BT Group PLC (BTGOF) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, BT Group PLC's (BTGOF, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for BT Group PLC (BTGOF, Financial) in one year is $1.80, suggesting a downside of 21.74% from the current price of $2.3. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the BT Group PLC (BTGOF) Summary page.
BTGOF Key Business Developments
Release Date: May 22, 2025
- Normalized Free Cash Flow: GBP1.6 billion, better-than-expected performance.
- Total Dividend: Increased to 8.16p per share.
- Openreach Full Fiber Footprint: Over 18 million premises.
- Broadband ARPU Growth: Increased by 6%.
- Consumer Revenue: Down 1% for the year.
- Business Revenue: Down 4%, impacted by international trading and FX.
- Openreach Revenue Growth: 1% increase driven by CPI-linked price increases.
- Adjusted EBITDA: GBP8.2 billion, up 1%.
- CapEx: GBP4.9 billion, broadly flat year-on-year.
- Headcount Reduction: 4,000 reduction in total headcount.
- Cost Savings: GBP930 million of gross annualized cost savings achieved.
- Future CapEx Reduction: More than GBP1 billion reduction expected post-2026.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BT Group PLC (BTGOF, Financial) achieved a record year in full fiber build and connections, reaching over 18 million premises.
- The company reported a better-than-expected GBP1.6 billion of normalized free cash flow, reflecting strong financial management.
- BT Group PLC (BTGOF) increased its dividend to 8.16p per share, demonstrating confidence in cash flow expansion.
- Openreach delivered growth in revenue and EBITDA, driven by CPI-linked price increases and increased FTTP mix.
- The company is accelerating its fiber build, aiming to pass up to 5 million homes in the coming year, enhancing its competitive position.
Negative Points
- BT Group PLC (BTGOF) faced revenue declines in consumer and business segments, with overall adjusted revenue down 2%.
- The fixed broadband market shrank slightly, creating a headwind for line losses, particularly in areas without full fiber.
- The company experienced ongoing drags from legacy products, impacting business revenue, which fell by 4%.
- Openreach's Q4 revenue growth was negatively impacted by the phasing of commercial and storm-related rebates.
- The company anticipates higher CapEx of around GBP5 billion in fiscal year '26 due to accelerated fiber build and provisioning.
