BT Group PLC (LON:BT.A) is no longer a sell for Deutsche Bank, but analysts still see a number of risks for the future.
The German bank upgraded its rating to hold as the shares are now seen as “more reasonable versus peers”, with the target price lifted to 125p from 110p.
BTs commitment to rolling out its fibre broadband network to 20mln homes by mid-to-late 2020s is a good thing for the companys long-term future, the analysts said in a note to clients.
“A full fibre network will be more resilient and cheaper to maintain,” they added, with the faster and further that BT builds the less likely it is likely to suffer market share losses.
However, the delay in announcing this full-steam rollout has led to cumulative risks from overbuilding the network, a trend towards convergence and exposure from TV and business clients from Covid-19.
Throw in the pension deficit, with the triennial review coming up at a time of weak asset values, “and the combination has been damaging”.
Therefore, the analysts said they continue to be surprised at how positive consensus has been on BT shares during the slow strategic metamorphosis towards fibre and the implications for its funding, although theres little positive in a share price that has fallen from almost 500p at the end of 2015 to near 100p this month.
“We see a number of risks for the future, particularly from the loss of Openreach's UK wholesale revenuesRead More – Source
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