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BT shares 'unlikely to re-rate amid uncertainty', says UBS

The telecoms group gave no update on how any expanded roll-out of superfast broadband would be financed, leaving investors to continue worrying about a dividend cut

BT Group PLC 'unlikely to rerate amid uncertainty', says UBS

BT Group PLC (LON:BT) shares dropped on Tuesday after UBS analysts highlighted the “significant uncertainties” that continue to cloud the telecoms giant’s future.

Briefing clients after BT held a ‘meet the new boss’ event with chief executive Philip Jansen, UBS said the new boss had given his perspective on the high-speed fibre broadband roll-out, where there remains uncertainty on the longer-term scope of the build out and who is going to carry out the process in rural areas.

On funding for fibre, UBS said there was no update on how any expanded fibre rollout would be financed, leaving investors to continue worrying about a dividend cut, in addition to further cost savings, reallocation of capex and higher debt.

With an increasingly competitive market, UBS reported that Jansen indicated BT “will not sit back and lose market share”, but that he suggested moves by competitors not to charge a premium price for 5G mobile are “not rational”.

Any Brexit impact is seen as manageable.

With the acknowledgement of various lingering uncertainties, UBS said: “until there is visibility, we think it will be difficult for the share price to re-rate in the near-term”.

BT shares were down 2.3% to 165p on Tuesday morning, but flattened off as the session wore on.

Quick facts: BT Group PLC

Price: 190.16 GBX

LSE:BT.A
Market: LSE
Market Cap: £18.79 billion
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