Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

BT Group boosted by UBS upgrade to ‘buy’ from ‘neutral’ with increased price target

UBS’s analysts said the increase in rating and target was driven primarily by a lower pension deficit estimate at £6.5bn gross versus consensus of £11bn-£12bn
BT logo
In late morning trading, BT shares on the FTSE 100 index were 2.3%, or 6.25p higher at 274.25p.

BT Group PLC (LON:BT.A) got a boost today after Swiss banking giant UBS upgraded its rating for the telecoms blue chip to ‘buy’ from ‘neutral’ and raised its price target to 330p from 310p.

In late morning trading, the FTSE 100 listed shares were 2.3%, or 6.25p higher at 274.25p.

READ: Morgan Stanley thinks BT shares look “cheap on a sum-of-the-parts valuation” but “cautious about stepping in too early"

In a note to clients, UBS’s analysts said the increase in rating and target was driven primarily by a lower pension deficit estimate at £6.5bn gross versus consensus of  £11bn-£12bn.

The analysts added: “We remain cautious on the fundamentals for BT but, at current  levels, we think the downside from overhangs weighing on the share price … is priced in and that newsflow over the coming quarters could turn more positive.”

They think UK government support could reduce or reverse regulatory cuts on wholesale fibre pricing, with an update due in February 2018, and this could mark the start of “an inflection in earnings momentum.”

The analyst added that an agreement with the BT pension trustees on the deficit looks likely by May 2018, but could come sooner, and it also expect the Premier League broadcast rights auction to be in February 2018.

They said their estimates for BT are little changed, and they expect underlying earnings (EBITDA) to be stable.

View full BT.A profile View Profile

BT Group PLC Timeline

Related Articles

August 19 2018
BATM's Networks & Cyber division returned to growth in 2017

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use