BT Group: Q1 ticks the box and should reassure

研报英文原文证据摘录

BT Group: Q1 ticks the box and should reassure

Akhil Dattani AC Europe Equity Research

(44-20) 7134-4725 23 July 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 6.4% 1.7% -9.5% -2.4% would see BT’s dividend covered for the first time in a decade.

Rel -4.3% 7.4% -6.0% -14.1%

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) 242-173 whilst still leave ample room for deleveraging, (3) Our analysis

Market cap ($ mn) 26,132.39

Exchange rate 74.76 suggests we are past peak pain on altnet competition, and that

Free float (%) 59.5% Openreach’s line loss should now steadily improve, (4) BT still

3M ADV (mn) 15.41 screens very cheap (13% Mar-29E EFCF yield).

3M ADV ($ mn) 43.0

Volatility (90 Day) 32 Valuation

Index SXKP Index

BBG ANR (Buy | Hold | Sell) 11|4|7 Our DCF-based valuation model drives a Mar-28 end price

target of 310p, which is supportive of our OW recommendation.

Key Metrics (FYE Mar)