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BT Group plc (GB:BT.A)
LSE:BT.A

BT Group plc (BT.A) AI Stock Analysis

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GBBT Group plc
(LSE:BT.A)
68Neutral
BT Group's stock score reflects a mix of positive technical trends and reasonable valuation, juxtaposed with financial performance challenges. The company's strategic initiatives in cost savings and fiber expansion are promising, but high leverage and revenue pressures remain concerns. Institutional confidence and management's actions provide additional support to the stock's outlook.

BT Group plc (BT.A) vs. S&P 500 (SPY)

BT Group plc Business Overview & Revenue Model

Company DescriptionBT Group plc (BT.A) is a British multinational telecommunications company headquartered in London, United Kingdom. It operates in the telecommunications, broadband, and digital services sectors, offering a wide range of products and services including fixed-line services, broadband, mobile and TV products, and networked IT services. BT Group serves both consumer and business markets, providing comprehensive communication solutions to its customers.
How the Company Makes MoneyBT Group plc generates revenue through multiple streams. The company's primary revenue comes from its Consumer segment, which includes broadband, mobile, and telecommunication services to residential customers. Additionally, BT's Enterprise segment provides managed network services, IT services, and fixed and mobile services to businesses. The Global segment offers communication and IT services to multinational corporations, while Openreach is responsible for managing and maintaining the UK's digital network infrastructure, earning revenue by charging telecommunication service providers for network access. Significant partnerships with technology firms and government contracts also contribute to BT's earnings, enhancing its service offerings and expanding its customer base.

BT Group plc Financial Statement Overview

Summary
BT Group faces challenges with declining revenue and profitability pressures. The balance sheet shows high leverage, posing risks in a competitive market. Cash flow remains strong, but high capital expenditures limit free cash availability. Improving profitability and reducing debt levels are key to enhancing financial stability.
Income Statement
60
Neutral
BT Group's revenue has shown a slight decline over recent years, reflecting the competitive pressures in the telecommunications industry. The gross profit margin stands at 46.7% for 2024, which is decent but has decreased from previous years. The net profit margin for 2024 is 4.1%, indicating reduced profitability compared to previous periods due to factors like increased operational costs. EBIT and EBITDA margins are stable, yet there's a notable decline in EBITDA from 2023 to 2024, suggesting operational challenges.
Balance Sheet
55
Neutral
The company's debt-to-equity ratio is relatively high at 1.88 in 2024, indicating significant leverage. Stockholders' equity has decreased over the past year, while total liabilities remain substantial. The equity ratio is 24.2%, highlighting moderate reliance on equity financing. Return on equity (ROE) is low at 6.8% for 2024, reflecting challenges in generating returns for shareholders amidst debt pressures.
Cash Flow
58
Neutral
Operating cash flow remains robust, but free cash flow has decreased significantly to 984 million in 2024 from previous years. The operating cash flow to net income ratio is high, indicating strong cash generation relative to profitability, but the free cash flow to net income ratio is low, suggesting limited cash available after capital expenditures. Overall, the cash flow situation is stable but constrained by high capital expenditures.
Breakdown
Mar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
20.80B20.68B20.85B21.33B22.91B
Gross Profit
9.71B15.17B13.78B13.80B15.72B
EBIT
2.21B2.62B2.88B2.59B3.28B
EBITDA
6.46B7.47B7.23B6.88B7.55B
Net Income Common Stockholders
855.00M1.91B1.27B1.47B1.73B
Balance SheetCash, Cash Equivalents and Short-Term Investments
2.31B3.94B3.46B4.65B6.60B
Total Assets
51.74B52.75B49.77B50.88B53.07B
Total Debt
23.48B23.88B21.95B22.84B25.89B
Net Debt
23.07B23.49B21.17B21.84B24.39B
Total Liabilities
39.22B38.24B34.48B39.20B38.30B
Stockholders Equity
12.52B14.51B15.30B11.68B14.76B
Cash FlowFree Cash Flow
984.00M1.42B1.30B1.06B2.17B
Operating Cash Flow
5.95B6.72B5.91B5.96B6.27B
Investing Cash Flow
-3.54B-6.40B-3.56B-3.24B-5.65B
Financing Cash Flow
-2.43B-636.00M-2.56B-3.22B-807.00M

BT Group plc Technical Analysis

Technical Analysis Sentiment
Positive
Last Price160.25
Price Trends
50DMA
146.93
Positive
100DMA
146.04
Positive
200DMA
140.50
Positive
Market Momentum
MACD
2.71
Negative
RSI
65.06
Neutral
STOCH
46.62
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:BT.A, the sentiment is Positive. The current price of 160.25 is above the 20-day moving average (MA) of 152.59, above the 50-day MA of 146.93, and above the 200-day MA of 140.50, indicating a bullish trend. The MACD of 2.71 indicates Negative momentum. The RSI at 65.06 is Neutral, neither overbought nor oversold. The STOCH value of 46.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:BT.A.

BT Group plc Peers Comparison

Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
GBVOD
77
Outperform
£18.15B8.944.36%7.83%-27.41%-76.23%
68
Neutral
£15.68B20.475.85%5.05%-0.75%-58.92%
59
Neutral
$30.54B0.25-13.23%4.04%2.36%-49.53%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:BT.A
BT Group plc
160.25
56.56
54.55%
GB:VOD
Vodafone
72.50
7.57
11.66%

BT Group plc Earnings Call Summary

Earnings Call Date: Nov 7, 2024 | % Change Since: 14.68% | Next Earnings Date: May 22, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture, with significant achievements in cost savings, fiber build-out, and consumer growth in 5G, contrasted by revenue declines and challenges in the business division. The company remains on track with its strategic goals, but faces ongoing pressure from revenue weakness, particularly outside the U.K.
Highlights
Openreach Record Performance
Openreach delivered record building connections, growing revenue by 2% and EBITDA by 6%. The fiber footprint reached 16 million premises, with a market-leading take-up rate of 35%.
Consumer Growth in 5G and Fiber
Excellent growth in 5G and fiber customer bases, with 5G connections up 17% and a postpaid mobile base increase for the first time in two years.
Cost Savings and EBITDA Growth
Achieved £400 million run rate savings, helping to deliver a 1% increase in adjusted EBITDA to £4.1 billion, despite a 3% revenue decline.
Increased Dividend
The interim dividend is set to increase by 4% to £0.024 per share, in line with the progressive dividend policy.
Lowlights
Revenue Decline
Adjusted revenue for the half was £10.1 billion, down 3% due to challenging conditions in business, particularly outside the U.K.
Consumer Revenue and EBITDA Decline
Consumer revenue and EBITDA were both down 1%, impacted by a challenging pricing environment and a lower broadband base.
Business Division Challenges
Business division revenue declined by 6%, driven by non-U.K. trading. EBITDA declined by 7%, reflecting revenue declines despite cost control efforts.
Company Guidance
During the conference call, BT Group provided detailed guidance for the fiscal year 2025, highlighting key metrics and strategic priorities. Allison Kirkby, the Chief Executive, noted that Openreach achieved record fiber connections and increased its market-leading take-up, surpassing expectations while reducing build costs. The company reported £400 million in run rate savings and a 1% increase in adjusted EBITDA to £4.1 billion, despite a 3% decline in adjusted revenue to £10.1 billion. The interim dividend was increased by 4% to £0.024 per share. Simon Lowth, CFO, mentioned a £100 million annual cost impact from changes in National Insurance contributions, which BT plans to offset through intensified cost transformation efforts. Openreach's H1 revenue grew by 2%, while Consumer revenue decreased by 1%, and Business revenue fell by 6%. The company reaffirmed its EBITDA guidance of around £8.2 billion for fiscal year 2025 and expects normalized free cash flow to be about £1.5 billion, despite adjusting revenue expectations to a 1%-2% decline.

BT Group plc Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance
Morgan Stanley Reduces Stake in BT Group Below 5%
Neutral
Mar 5, 2025

Morgan Stanley has reduced its holdings in BT Group plc, dropping below the 5% threshold of voting rights, which triggered a notification. This change in holdings led Morgan Stanley to apply the trading book exemption to its remaining applicable holding of 4.980864% as of February 28, 2025, indicating a shift in their investment strategy regarding BT Group.

Regulatory Filings and Compliance
BT Group Announces Total Voting Rights for February 2025
Neutral
Feb 28, 2025

BT Group plc announced that as of 28 February 2025, its capital comprised 9,968,127,681 ordinary shares with voting rights, with 11,290,418 held as treasury shares. This brings the total number of voting rights to 9,956,837,263, a figure important for shareholders to determine their notification obligations under the FCA’s rules.

M&A TransactionsBusiness Operations and Strategy
Morgan Stanley Acquires Significant Stake in BT Group
Neutral
Feb 25, 2025

BT Group plc has announced a significant change in its shareholder structure, with Morgan Stanley acquiring a substantial portion of voting rights through various financial instruments. This acquisition, which sees Morgan Stanley holding over 5% of voting rights, could influence BT Group’s strategic decisions and impact its market positioning, reflecting the growing interest of major financial institutions in the company’s operations.

Regulatory Filings and Compliance
Morgan Stanley Reduces Stake in BT Group Below 5%
Neutral
Feb 17, 2025

Morgan Stanley has reduced its holdings in BT Group PLC to below 5%, triggering a notification requirement. This change reflects an application of the trading book exemption to its remaining stake of 4.99%, as of February 13, 2025, potentially impacting BT Group’s shareholder composition and market perception.

Business Operations and Strategy
Morgan Stanley Increases Stake in BT Group
Positive
Feb 14, 2025

Morgan Stanley has increased its stake in BT Group plc through a combination of direct voting rights and financial instruments, reaching a total of 5.025% of voting rights. This acquisition, primarily through equity swaps and options, suggests a strategic interest in BT’s operations, potentially impacting the company’s market positioning and signaling confidence from a significant institutional investor.

Regulatory Filings and Compliance
Morgan Stanley’s Stake in BT Group Drops Below 5%
Neutral
Feb 11, 2025

BT Group plc has announced a change in the voting rights held by Morgan Stanley, with the investment bank’s total holding falling below the 5% threshold to 4.99% as of February 7, 2025. This adjustment has prompted Morgan Stanley to apply a trading book exemption to its remaining holdings, indicating a significant shift in stakeholder engagement and potentially impacting BT Group’s market positioning.

DividendsRegulatory Filings and Compliance
BT Executives Reinvest Dividends, Show Confidence in Company
Positive
Feb 11, 2025

BT Group plc announced transactions involving key executives, including CEO of Business, Bas Burger, and Group General Counsel, Sabine Chalmers. Both executives reinvested dividends into additional shares, indicating confidence in the company’s future performance. These transactions are part of the company’s compliance with the EU Market Abuse Regulation, reflecting transparency and alignment with shareholder interests.

DividendsBusiness Operations and Strategy
BT Group Executives Reinvest Dividends in Shares
Positive
Feb 11, 2025

BT Group plc announced the reinvestment of dividends into further shares by key executives, including CEO Consumer Marc Allera, Group General Counsel Sabine Chalmers, and Chief Security and Networks Officer Howard Watson, under the BT Group Employee Share Investment Plan. This move, conducted at a price of £1.47 per share, reflects the company’s strategy to align management interests with shareholder value, potentially strengthening stakeholder confidence and impacting market perceptions positively.

Regulatory Filings and Compliance
BT Group plc Announces Total Voting Rights for January 2025
Neutral
Jan 31, 2025

BT Group plc has announced that as of January 31, 2025, its capital consists of 9,968,127,681 ordinary shares with voting rights, excluding 11,290,418 shares held in treasury, resulting in a total of 9,956,837,263 voting rights. This information is crucial for shareholders to determine their notification requirements under the FCA’s rules, impacting how they report their interests or changes in interests in the company.

Executive/Board ChangesM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
BT Group’s Modernization Drives Progress Amidst Challenging Conditions
Positive
Jan 30, 2025

BT Group has reported significant progress in its modernization efforts, achieving increased fibre build, customer satisfaction, and EBITDA growth despite lower revenue outside the UK and weak handset sales. Notably, Openreach achieved a record full fibre build for the fourth consecutive quarter, while the Consumer division returned to service revenue growth. The company is focused on the UK market, with a strategic sale of its data centre business in Ireland, and has appointed Jon James as the CEO of a UK-centric BT Business. BT Group remains on track with its financial outlook, projecting substantial cash flow growth by the end of the decade.

Morgan Stanley Reduces Stake in BT Group Below 5%
Jan 15, 2025

BT Group plc issued a notification regarding a change in major holdings, as Morgan Stanley’s total applicable holding fell below the 5% threshold. This shift signifies a reduction in Morgan Stanley’s voting rights influence within BT Group, as it now holds 4.98% and has applied the trading book exemption. This adjustment could affect stakeholder dynamics and market perception of BT Group’s shareholder composition.

BT Group Updates Shareholders on Total Voting Rights
Dec 31, 2024

BT Group plc announced that as of 31 December 2024, the company had a total of 9,956,837,263 voting rights following the holding of treasury shares. This disclosure allows shareholders to accurately calculate and notify any changes in their interest according to regulatory requirements, ensuring transparency and compliance with the FCA’s guidelines.

BT Group’s Major Shareholding Update: Morgan Stanley’s Increased Stake
Dec 23, 2024

BT Group plc has announced a change in its major holdings, with Morgan Stanley crossing a threshold in its acquisition of financial instruments. The change affects the voting rights distribution, with Morgan Stanley now holding a total of 6.693185% of voting rights in BT Group. This adjustment signifies a notable shift in the company’s shareholder structure, potentially impacting its governance and decision-making processes.

BT Group Wins Competition Tribunal Case, Upholding Conduct
Dec 19, 2024

The Competition Appeal Tribunal (CAT) has dismissed a class action lawsuit against BT Group plc, filed by Justin Le Patourel, concluding that BT Group did not violate competition laws. This ruling underscores BT Group’s commitment to its customers and strengthens its position within the telecommunications industry by alleviating potential legal and reputational risks.

BT Group PLC Announces Changes in Major Holdings by Morgan Stanley
Dec 11, 2024

BT Group PLC has announced a change in its major holdings due to Morgan Stanley’s acquisition or disposal of financial instruments. As of December 6, 2024, Morgan Stanley holds a total of 7.791683% of voting rights in BT Group, down from a previous position of 9.046742%. This adjustment in holdings could influence BT Group’s strategic decisions and impact shareholder dynamics, given Morgan Stanley’s significant stake in the company.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.