BT Group PLC is still a 'sell' reckon the analysts at Deutsche Bank, with the recent boost to the share price likely to prove only temporary as competition to broadband arm Openreach intensifies.
Opinion on BT shares currently divides more or less on what view the analyst takes on the prospects for Openreach, with few believing BT is likely to face a full bid from 18% shareholder Altice or elsewhere.
Deutsche Bank is downbeat on Openreach’s outlook, hence the rating.
The chief worry for the broker is the building by alternative network providers (alt-nets) of huge amounts of rival infrastructure and especially the plan for full-fibre to the home by Virgin Media O2.
“We see rising competition in fixed infrastructure feeding through to retail and though serendipitous price rises and tax breaks provide a temporary boost, underlying value is less compelling and tariff hikes risk longer-term profits.”
The broker has raised its price target to 140p, but the investment verdict remains sell.
Shares rose 1% to 193.5p.