Numis remains bullish on BT Group (LON:BT.A), arguing that consensus forecasts for the former telecoms monopoly are ‘likely to start climbing,’ Proactive Investors reports. The news comes after the FTSE 100 company moved closer to an overhaul of its pension scheme, as members of the Prospect trade union voted in favour of the telco’s proposals.
BT’s share price has fallen deep into the red in London in today’s session, having given up 1.37 percent to 269.05p as of 13:49 GMT. The shares are underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.02 percent lower at 7,747.12 points. The group’s shares have lost just under a third of their value over the past year, as compared with more than a six-percent rise in the Footsie.
Numis upbeat on BT
Numis reiterated its ‘buy’ rating on BT today, valuing the shares at 400p. Proactive Investors quoted the analysts as saying in a note that they thought that the consensus expects no volume growth post a price cut by industry regulator Ofcom, which they see as ‘unrealistic’. The broker also reckons that consensus forecasts of pension top-ups required by the former telecoms monopoly have changed relatively little in the last seven quarters which they think is ‘too bearish’.
Numis also thinks that consensus forecasts ignore BT noting that its turnaround in ‘Public Sector’ is near complete and that its ‘Business’ unit is set to keep winning mobile market share.
BT share price to recover
Numis therefore concludes that upgrades to consensus forecasts for the telco are likely from now, while BT’s share price will recover strongly in 2018.
The former telecoms monopoly is scheduled to update investors on its third-quarter performance on February 2.