BT Group PLC's (LSE:BT.A) third-quarter (Q3) results provided "some comfort" but difficult times are "far from over", was the conclusion of analysts at Deutsche Bank following Thursday's numbers and a subsequent investor call.
The FTSE 100-listed telco's Q3 2023 EBITDA saw a small miss with no major one-offs and a tough comparative, the German bank's analysts noted, with a FCF (free cashflow) miss on higher capex, but all full-year targets were reiterated.
They pointed out that the company's Enterprise business saw trends improve slightly, with Openreach KPIs (key performance indicators) steady, but the Consumer unit slowing.
The analysts said: "BT shares should see some relief on Openreach KPIs and reiterated guidance, however, alt-net build keeps us cautious vs a cheaper, lower-risk peer group."
In further comment following the investor call, the analysts added: "As for-quite-some-time BT stock sceptics (less so since Sep 22), we found more than a few 'crumbs of comfort' in management comments on the Q3 call with regard to 'building and connecting fibre with fury', on the impact of the alt-nets and the vehemence of price raise intentions and the drop through to the bottom line."
The analysts noted: "Management were keen to stress that guidance reiteration, given the headwinds (energy, wages, etc), is a good result and was achieved by good cost control (and, we note, higher prices). We don't disagree but we remain cautious."
They concluded: "A few crumbs don't make a desirable telco biscuit."
The Deutsche Bank analysts reiterated a 'hold' rating and 140p price target on BT stock. In early morning trade on Friday, BT shares were trading at 132.10p, down 0.2%.