BT share price subdued as Berenberg flags regulatory hurdles

Analysts trim valuation on former telecoms monopoly

BT share price subdued as Berenberg flags regulatory hurdles

BT Group’s (LON:BT.A) shares have lost ground in today’s session as analysts at Berenberg trimmed their price target on the shares, flagging regulatory hurdles for the former telecoms monopoly, Proactive Investors reports. The comments come ahead of the blue-chip group’s third-quarter results on Friday.

As of 13:24 GMT, BT’s share price had lost 0.71 percent to 258.40p, marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.64 percent lower at 7,622.73 points. The group’s shares have lost more than 15 percent of their value over the past year, as compared with a near seven-percent rise in the Footsie.

Berenberg trims price target on BT

Berenberg reiterated its ‘hold’ rating on BT today, while lowering its price target on the shares from 325p to 320p.

“We struggle to see sufficient positive catalysts for the shares to recover lost ground in the near term,” the analysts explained, as quoted by Proactive Investors. The broker argues that the era of unconstrained price rises seems to be ending given the tightening of regulation which poses a risk to consumer revenues. On the roll-out of ultrafast fibre-optic broadband, Berenberg acknowledged that BT was in a situation where it had to tolerate a return on investment which was less attractive than it would like. 

The broker, however, noted that risks related to the fibre to the premises and BT’s pension review were already priced into the shares, and that it was ‘less worried’ about the threat of BT losing its Premier League broadcasting rights in an upcoming bidding round next month.

Other analysts on telco

HSBC meanwhile reaffirmed its ‘buy’ rating on the shares today, with a price target of 360p. According to MarketBeat, the former telecoms monopoly currently has a consensus ‘hold’ rating and an average price target of 327.24p.

As of 14:05 GMT, Tuesday, 30 January, BT Group plc share price is 257.95p.

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