Hargreaves Lansdown sees some positives for BT Group (LON:BT.A) investors following the telco’s updates, Citywire reports. The comments come after the former telecoms monopoly updated investors on its quarterly performance and unveiled its new strategy as it looks to cut costs.
BT’s share price fell sharply in London yesterday, shedding 7.36 percent to close at 221.05p, and underperforming the broader UK market, with the benchmark FTSE 100 index ending the session in positive territory. The group’s shares have lost just under 30 percent of their value over the past year.
HL weighs in on BT
Citywire quoted Hargreaves Lansdown analyst George Salmon as commenting yesterday that although BT’s job cuts will only go some way to delivering £1.5 billion in cost savings and next year’s profits looked likely to fall, there were nevertheless ‘silver linings’ in the telco’s results. The former telecoms monopoly disclosed yesterday that its revenue had slipped in the last quarter of its financial year, and further announced plans to axe about 13,000 jobs over the next three years, mainly back office and middle management roles, in an effort to trim costs.
“EE and the consumer businesses continue to grow,” the analyst pointed out, adding, however, that those improvements were “being more than offset by challenging conditions elsewhere”.
“Openreach terms are getting tougher, and the business-to-business and global divisions are having a torrid time. [Chief executive] Gavin Patterson will have his work cut out if he’s to steady the ship,” Salmon noted.
Other analysts on telco
Jefferies Group, which sees the blue-chip group as a ‘neutral,’ set a price target on the shares of 215p yesterday. According to MarketBeat, the former telecoms monopoly currently has a consensus ‘hold’ rating and an average price target of 309.29p.