Citi upgraded BT Group, a FTSE 100-listed telco, to its current status.
The share price was particularly weak in the second quarter of 2022 due to concerns about the impact of the heavy network investment on free cashflow generation, rising taxes, interest costs, and labour and overheads.
Citi suggests that BT could make some adjustments to its pricing structure, including wholesale pricing. Retail prices could also see a significant increase in the backbook (14%), but retail prices could be affected as ISP (internet service providers) margins shrink.
The new rating is ‘Buy’ with a price target at £1.60.
At 127.3p, shares were up 0.5%
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