BT share price left by the FTSE 100 index as focus shifts to May 16

By:
on May 7, 2024
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  • BT Group’s stock price has crashed by over 15% this year.
  • The company’s revenue and profit growth has slowed while costs have risen.
  • The FTSE 100 index has risen to a record high this year.

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BT Group’s (LON: BT.A) share price has been left in the dust by the FTSE 100 index this year. It has plunged by over 15% this year while the FTSE 100 has soared by over 8% to a record high of £8,310. It became one of the worst-performing companies in the index. Worse, it has plunged by over 41% from its highest level in June 2021.

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Growth concerns remain

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UK telecom companies are not doing well as concerns about their growth and profitability continue. Vodafone’s stock has also plunged by over 40% from its highest point in 2021.

This performance is in contrast to other European telecom companies. In Germany, Deutsche Telekom stock soared to a high of €21.60, near its highest point since 2000. Similarly, Telefonica shares have risen to their highest point since July 2022 while Swisscom has also surged.

BT Group has not done well in the past few years. The most recent results showed that the company’s revenue rose to £15.75 billion in the nine months to December last year. Its consumer revenue rose to £7.4 billion while its Openreach revenue rose by 7% to £4.57 billion. 

For the third quarter, the company’s revenue rose to £5.34 billion, a small increase from £5.21 billion in the same period a year earlier. 

The next important BT Group news will be the company’s financial results scheduled for May 15th. Analysts expect that its revenue growth remained under pressure in the final quarter of the financial year.

Its full-year revenue is expected to come in at £20.43 billion. They also expect its revenue will grow to £20.8 billion in the next financial year followed by £21.0 billion and £21.18 billion in the next two years.

Therefore, analysts believe that the company is severely undervalued. It has a market cap of over £10.52 billion compared to its estimated EBITDA figure of £7.9 billion.

BT share price forecast

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BT share price

BT chart by TradingView

Turning to the weekly chart, we see that the BT Group stock price formed a double-top pattern at 179.25p between June 2021 and February 2022. It has crashed below the 50-week and 100-week Exponential Moving Averages (EMA).

The stock has also formed a descending triangle, which is a popular sign of bearish continuation. It is trading near the lower side of the pattern. It has also formed a bearish flag pattern.

Therefore, the outlook for the stock is bearish, with the next point to watch being at 83.20p, which is its lowest swing in September 2020. That price is about 21% below the current level.

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