EN
BT Group plc (LON:BT.A) Just Released Its Half-Yearly Results And Analysts Are Updating Their Estimates
Shareholders might have noticed that BT Group plc (LON:BT.A) filed its half-yearly result this time last week. The early response was not positive, with shares down 4.5% to UK£2.17 in the past week. It was an okay report, and revenues came in at UK£8.8b, approximately in line with analyst estimates leading up to the results announcement. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on BT Group after the latest results.
Following the recent earnings report, the consensus from 14 analysts covering BT Group is for revenues of UK£18.3b in 2027. This implies a discernible 7.2% decline in revenue compared to the last 12 months. Per-share earnings are expected to climb 18% to UK£0.14. Before this earnings report, the analysts had been forecasting revenues of UK£18.5b and earnings per share (EPS) of UK£0.14 in 2027. So the consensus seems to have become somewhat more optimistic on BT Group's earnings potential following these results.
Check out our latest analysis for BT Group
The consensus price target was unchanged at UK£2.27, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic BT Group analyst has a price target of UK£3.40 per share, while the most pessimistic values it at UK£1.43. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the BT Group's past performance and to peers in the same industry. One more thing stood out to us about these estimates, and it's the idea that BT Group's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 14% to the end of 2027. This tops off a historical decline of 1.8% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 2.2% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect BT Group to suffer worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around BT Group's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at UK£2.27, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple BT Group analysts - going out to 2029, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for BT Group you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.