BT Group PLC (LSE:BT.A) is a ‘Sell’, that’s a snapshot of Deutsche Bank’s view of the UK telco following Thursday’s trading update.
The German bank’s bearish call comes with a 140p price target, against a current market price of around 222p.
In a note, Deutsche analyst Robert Grindle notes the retail pressure on the telco, but also acknowledged there was some relief to seen in the BT update too, including expectation-beating performance in the Openreach unit, with broadband losses showing signs of slowing,
The unit’s losses weren’t as bad as DB had forecast; nevertheless, the German bank noted that BT isn’t flinching in terms of its outlook, and it still expects to see around 900,000 fewer connections this year to its competitors.
BT on Thursday, meanwhile, described the 169,000 decline in broadband lines as “in line with expectations.”
In the trading update, he telecoms group reaffirmed its full-year and mid-term financial guidance, despite profit falling 10%.
BT reported revenue of £4.9 billion for the quarter to 30 June, down 3% year-on-year due to weaker mobile handset sales and continued "challenging" international trading.
This offsets the benefit from price increases and growth from full-fibre broadband at Openreach, where net customer adds were up 46% to 566,000, but broadband lines declined by 169,000, which BT said was in line with expectations.
Adjusted EBITDA was £2.1 billion, down 1%, with profit before tax falling 10% to £468 million, mainly due to higher finance costs and depreciation.
The company's workforce was cut 5% to 113,000 as the board pushed through cost efficiencies, which were said to "fully offset" increases in the minimum wage and increased National Insurance contributions.
Chief executive Allison Kirkby said it was "a solid start to the year" as she looks to continue her transformation and "radically simplify our business while improving customer experience".
BT also announced that Patricia Cobian (current CFO at Virgin Media 02) will become its new group chief financial officer in 2026, succeeding Simon Lowth, who will retire after nine years in the role.