Berenberg has cut its target price for BT Group PLC (LON:BT.A) to 175p from 220p, but, with the shares currently trading significantly below that level, it has maintained a ‘hold’ rating on the telecoms group.
In afternoon trade on Friday, BT shares were changing hands at 154.88p each, down 1.2% on Thursday’s close.
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In a note to clients, the German bank’s analysts said: “With financials under pressure, considerable political interference, capex set to increase in Openreach, and margins being squeezed in Consumer and Enterprise, we are very sympathetic with the Sell case for BT."
“However," they added, "the stock is cheap and we believe that one would either have to be overly negative on the rate of decline in BT’s financials or take a strong view on real gilt yield deterioration to justify a price target significantly below the current share price.”