BT Group FY results. Q4 touch ahead. Mar-27 guide in line and OR line loss -800k. New dividend policy unveiled

Research evidence excerpt

BT Group FY results. Q4 touch ahead. Mar-27 guide in line and OR line loss -800k. New dividend policy unveiled

Akhil Dattani AC Europe Equity Research

(44-20) 7134-4725 21 May 2026 C A Z E N O V E

akhil.dattani@jpmorgan.com

Price Performance Summary Investment Thesis and Valuation

Investment Thesis

Despite having doubled off its 2024 lows, BT remains the most

heavily debated Telco in Europe. Pushbacks center around the

perceived threat from altnets, the credibility of an as-yet

unproven EFCF inflection, the headwind of persistent

consensus downgrades, and a still sizeable pension deficit.

Critically, we expect an easing of many of these concerns, which

should confound the critics, and fuel the next leg of BT’s re-

rating: (1) Following six years of rangebound cash generation,

Mar-27E should deliver 30% growth, lending credibility to

YTD 1m 3m 12m management’s ambition of doubling EFCF by Mar-30E, (2) This

Abs 25.5% 5.5% 13.7% 35.8% would see BT’s dividend covered for the first time in a decade.

Rel 0.3% -0.2% 7.0% 15.3%

Against this backdrop, we expect BT to materially grow its

Company Data dividends in-line with its EFCF growth outlook. We show that

Shares O/S (mn) 9,968 doubling the dividend by Mar-30E would deliver an 8% yield,

52-week range (p) 242-160 whilst still leave ample room for deleveraging. This would

Market cap ($ mn) 30,935.44

Exchange rate 74.43 demonstrate BT’s confidence in its outlook, and help close the

Free float (%) 84.0% duration gap, (3) Our analysis suggests we are past peak pain on

3M ADV (mn) 13.70 altnet competition, and that Openreach’s line loss should now

3M ADV ($ mn) 40.0

Volatility (90 Day) 31 steadily improve, (4) BT still screens very cheap (14% Mar-30E

Index SXKP Index EFCF yield).

BBG ANR (Buy | Hold | Sell) 9|5|7

Valuation