While the telecoms group is expected to see underlying profits (EBITDA) slide 4% between the 2020 and 2023 financial years, analysts at the Swiss bank forecast 1% EBITDA growth to £8.0bn.
A lack of global sport because of the coronavirus pandemic will result in around a £400mln EBITDA hit to BT Sport in 2021 compared to 2020.
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But with the majority of global sports returning to full pace by autumn 2020, the analysts believe that by the 2022 financial year “most of the negative impacts on BT Sport will have reversed” and with the full effect by 2023 as pubs and clubs payments are back.
Furthermore, Openreach’s fibre-to-the-premises (FTTP) build expansion to 20mlh properties is expected to drive a compounding effect, boosting annual EBITDA by roughly £100m per year over the next few years, which Credit Suisse believes will largely offset ongoing expected UK economy headwinds.
Adding in recent consumer price increases, the analysts have raised their forecast EBITDA for 2022-23 by up to 1% and normalised free cash flow forecasts by 1-5%.
With an ‘outperform’ rating reiterated, Credit Suisse’s share price target was raised to 185p from 180p.