Shares in BT Group PLC (LON:BT.A) drifted in morning trade following a downgrade by Goldman Sachs.
The Wall Street bank, noted for moving markets, not just share prices, removed the stock from its pan-European ‘buy’ list as it went to a ‘neutral’ recommendation.
The call was essentially valuation-based, with shares in BT having climbed more than 10% in the wake of the BT earnings alert in mid-January.
That puts it within touching distance of Goldman’s new price target of 360p a share.
It shaved 10p from the valuation to reflect a more bearish outlook for the business.
Goldman admits in the circular sent out to clients to having been quite generous on its assumptions about the outcome of the Wholesale Local Access Review (WLA) by regulator Ofcom.
The broker also appears to have been quite generous on its assertions about capital investment to get it to the free cash flow yields it was forecasting.
BT offers “lower growth than its peers” and the “regulatory upside is less clear” than it was, Goldman’s note asserted.
Of the 15 analysts logged as following BT by the Broker Forecasts website, seven have ‘buy’ recommendations, while only one says ‘sell’. The remainder are in the Goldman camp in seeing the stock as fully valued.
In the last six months the consensus share price target has come down from 462p to 405p - which is still ahead of the current price.
At 10am the shares were off 1.3% at 328.3p each.