Equities Media Services

BT share price: Barclays sees telco as ‘equal weight’

Barclays continues to see BT Group (LON:BT.A) as an ‘equal weight,’ arguing that while the telco’s valuation provides a compelling argument to buy the shares, the group’s  consumer division is under pressure and there is uncertainty over the planned roll out of fibre broadband, Proactive Investors reports. The comments came after the former telecom monopoly updated investors on its first-quarter performance last week, posting a fall in revenue and profits.

BT’s share price has been subdued in London this Monday, having given up 1.31 percent to 183.58p as of 14:35 BST. The stock, however, is outperforming the broader market selloff which has seen the benchmark FTSE 100 index give up 1.99 percent to 7,259.61 points so far today. The group’s shares have lost more than 21 percent of their value over the past year, as compared with about a 5.4-percent fall in the Footsie.

Barclays sees BT as ‘equal weight’

Barclays reaffirmed BT as an ‘equal weight’ today, with a share price target of 240p. Proactive Investors quoted the broker as commenting that the most compelling argument for buying shares in the blue-chip telco appeared to be valuation.

“With the stock on an estimated 8%+ dividend yield and 5.5% unlevered free cash flow yield, this appears compelling,” the analysts elaborated, adding, however, that there was “clear pressure in consumer, which threatens future earnings power, and the company cannot/will not give clarity on the outlook for the fibre to the home (FTTH) rollout and associated capital expenditure/dividend”.

“As such the valuation argument is unlikely to play out near term, in our view,” Barclays pointed out.

Other analysts on telecom group

UBS reaffirmed the former telecom monopoly as a ‘neutral’ today, without specifying a target on the BT share price. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average valuation of 270.50p.

Tsveta van Son Tsveta van Son
Tsveta van Son is part of Invezz’s journalist team. She has a BA degree in European Studies and a MA degree in Nordic Studies from Sofia University and has also attended the University of Iceland. While she covers a variety of investment news, she is particularly interested in developments in the field of renewable energy.
Rate this post
Total: 0 Average: 0

Investing is speculative. When investing your capital is at risk. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Your investment may not qualify for investor protection in your country or state of residence, so please conduct your own due diligence. This website is free for you to use but we may receive commission from the companies we feature on this site. Click here for more information.