BT Group PLC (LSE:BT.A)lc is getting a good deal as it divests out of it sports broadcasting division, that’s according to analysts at Credit Suisse.
The Swiss bank said the deal news was the main positive to takeaway from Thursday’s first quarter results.
In a new partnership with Eurosport owner Warner Bros Discovery Inc (NASDAQ:WBD) (Warner Bros Discovery Inc (NASDAQ:WBD)), the BT Sport business will be moved into a new 50:50 joint venture company, with the London-listed PLC receiving an initial £93mln from Warner followed up with up to £540mln of earn-out over up to four years. Discovery also holds an option to acquire BT’s remaining 50% stake in the partnership.
“While the deconsolidation impact of the deal is broadly neutral to EBITDA, we think this is still a better valuation than what is implied in BT shares,” Credit Suisse analysts said in a note.
Elsewhere. Barclays dissected BT’s financial results with analyst Maurice Patrick calling the telecoms firm an “inflation play”. Some two-thirds of BT’s revenue is inked to inflation, the analyst noted.
“Although there are cost headwinds in the year ahead, should the 9% retail price increases land well, BT will likely see growth rebound strongly,” Patrick said.
“This should be evident next quarter.”
Barclays has an ‘overweight’ rating with a 240p price target (the current share price is 177p), whilst Credit Suisse retains a ‘neutral’ stance, with a 200p target.