BT Group PLC (LSE:BT.A) shares tumbled over 5% on Tuesday after being hit with a double whammy of a downgrade by Citi analysts and a stake cut by Morgan Stanley.
Flagging declining revenues in the telecoms group's Openreach infrastructure division, Citi dished out a 'sell' rating and slashed its share price target to 112p from 200p.
Revenues at Openreach, which installs and maintains telephone cables and other equipment, are expected to decline this year ahead and stay negative for the rest of the decade, according to Citi.
“[This] could see a negative shift in sentiment and questions as to whether BT will achieve its guidance for £3 billion of normalised free cash flow by the end of the decade,” the US bank said in a note to clients.
Concerns around the long-term sustainability of pricing in BT’s consumer division were also cited, alongside expectations for restructuring costs to reduce significantly ahead.
Morgan Stanley also separately cut its stake in BT to below 5%, according to a Monday evening regulatory filing.
Shares dropped 5.2% to 43.65p on Tuesday.