Analyst coverage of BT Group PLC (LSE:BT.A) had a negative hue to it on Thursday, with both Citi and Deutsche Bank reiterating 'sell' recommendations.
The American bank, with a 140p target price, cautioned that the telco faces a “risk event” when it reports second-quarter results on November 6.
It also warned that BT will need to explain how earnings can recover in Q4 after another likely dip in Q3, even to meet the lower end of its guidance. Citi also cited a weak UK consumer backdrop and worsening Openreach line losses as pressures.
That stance chimes with commentary from Deutsche following the Connected Britain conference this week.
It said the event, which brought together network operators, regulators, equipment makers and internet providers, underscored how competitive the UK fixed-line market has become.
Deutsche highlighted the growing ambitions of alternative fibre network operators (“alt-nets”) and the likely eventual consolidation that will follow.
For BT’s Openreach unit, that means continuing competitive pressure and potential wholesale challenges. Virgin Media O2, half-owned by Liberty Global, faces similar issues but may benefit from opportunities to retail services off-net via nexfibre and to wholesale capacity to other providers.
Both Citi and Deutsche flagged the UK broadband sector as structurally tougher, reinforcing concerns about BT’s ability to deliver growth as rivals expand and margins tighten.