This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Technical Observations – For
Technical Observations – Against
Share price breakdown increases potential for sell-off to recent lows. CEO on his way out could mean strategy uncertainty. Difficult relationship with regulators. Trouble with strategy of last few years. Current 7% dividend yield may not be sustainable. Broker Credit Suisse (16 Jul) said Fiber investment may cost dividend.
Risks to the shares include a strong set of Results on 27 Jul; an increase in the dividend or a fall in government bond yields which attracts income seekers; Regulatory changes in favour of BT network (Openreach), or competitors going bust, meaning less competition; there was activist investor interest in Openreach in late May.
Consensus is Bullish (50% of brokers say Buy; only 8% say Sell) while 86% of brokers suggest upside from current levels. This is in spite of the shares being in a 2yr downtrend. Potential for downgrades.
Next Event: First Quarter results, 27 July; Ex-div(10.55p), 9 Aug
Latest Broker 12-Month Consensus: 50% Buy, 42% Hold, 8% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 3.0 | 8.3 | -1.9 | -18.8 | -24.2 | -45.5 | -51.1 | -42.9 | -29.4 |
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Prepared by Michael van Dulken, Head of Research