The investment case for BT Group PLC (LSE:BT.A) is being flattered by hopes that may prove hard to sustain, that's according to analysts at Deutsche Bank, who have repeated a Sell rating and a 150p price target.
DB, in a note, said BT had benefited over the past year from the same forces that lifted the wider telecoms sector: stake-building, consolidation expectations, the prospect of lower fibre capital expenditure and its perceived status as a relative “safe-haven” from geopolitics and AI disruption.
But, the telco share has since retraced, and the price is now broadly in line with the rest of the European telecoms sector index, the German bank noted.
“The company is executing well in a tough environment, but the reasons for bullish-ness (alt-net distress, mobile market repair and take-outs) are illusory whilst peers have positives to offset competitive risks,” analyst Robert Grindle said.
DB claimed that BT’s challenge is less about operational missteps and more about valuation and market structure, and the UK backdrop remains competitive, and the stock lacks the offsetting positives seen elsewhere in the sector.
