Interactive Investors argues that while BT Group’s (LON:BT.A) half-year results saw a surprise dividend cut, the ‘lumbering giant’ may now be starting to take a different direction, Citywire reports. The comments come after the former telecoms monopoly posted its interim results last week, noting that it expects its full-year earnings to come in at the upper end of its guidance.
BT’s share price rose in the previous session adding 1.30 percent to close at 264.65p, outperforming the broader UK market, with the benchmark FTSE 100 index closing marginally in the red. The group’s shares, however, have fallen into negative territory this morning, having given up 0.17 percent to 264.20p as of 08:03 GMT, largely in line with a dip in the Footsie.
BT seen heading in different direction
Citywire quoted Interactive Investor analyst Richard Hunter as pointing out that analyst consensus on BT’s shares stood at ‘a hold, albeit a strong one’ following a 24-percent hike in pre-tax profit driven by reduced operating costs, although the telco’s revenue was down 1.7 percent over six months.
“A new direction of travel may be beginning to emerge, and the initial share price reaction is one of extremely positive relief,” the analyst pointed out, adding that this folded “into what has been a disappointing year for the shares”.
“It may well be that future quarters provide further solace, but for the moment the jury is out on the market consensus,” Hunter concluded.
Other analysts on blue-chip telco
HSBC, which rates BT as a ‘buy’ boosted its price target on the shares from 225p to 275p on Friday. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 272.67p.