BT share price: Barclays points to headwinds for telco

Analysts nevertheless lift valuation on former telecoms monopoly

BT share price: Barclays points to headwinds for telco

Barclays argues that BT Group (LON:BT.A) faces a number of headwinds in coming quarters, Proactive Investors has reported. The comments came as the broker lifted its price target on the former telecoms monopoly.

BT’s share price has fallen marginally into the red in today’s session, having given up 0.12 percent to 254.70p as of 13:30 GMT. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index which currently stands 0.66 percent lower at 7,093.75 points. The group’s shares have added about 1.6 percent to their value over the past year, as compared with about a 5.3-percent dip in the Footsie.

Barclays weighs in on BT

Barclays reaffirmed BT as an ‘equal weight’ today, while lifting its price target on the shares from 250p to 260p.

“BT’s recent share price outperformance reflects a solid 2Q result, with EBITDA well ahead of expectations on solid cost execution,” the analysts pointed out, as quoted by Proactive Investors. “This raises in our view the question of whether the steady drip of earnings cuts that have plagued the name for the past few quarters is now over.”

The broker, however, noted that “the former telecoms monopoly was  set to see a number of headwinds in the coming quarters, notably Openreach wholesale price cuts, fixed retail market share losses, and continued enterprise pressure”.

The comments came after BT updated investors on its interim performance this month, noting that it expected its full-year earnings to come in at the upper end of its guidance. 

Other analysts on telco

Royal Bank of Canada reaffirmed BT as a ‘sector performer’ this week, without specifying a price target on the shares. According to MarketBeat, the blue-chip telco currently has a consensus ‘hold’ rating and an average valuation of 273.33p.

As of 13:50 GMT, Friday, 09 November, BT Group plc share price is 254.92p.

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