BT Downgraded by Analysts Despite "Making Steady Progress"

Morningstar analysts say the telecoms firm is moving in the right direction and its shares remain undervalued, despite a tough regulatory environment

James Gard 30 May, 2019 | 11:03AM

BT

FTSE 100 telecoms giant BT (BT.) has been downgraded by Morningstar analysts amid concerns over regulatory pressure affecting profit margins. Despite the drop in its fair value estimate from 360p to 320p, the company remains undervalued, according to analyst Michael Hodel, with shares currently trading below 200p after sustained share price weakness in recent years.

“We believe the firm is gradually moving in the right direction, but progress will likely be slow,” he says. BT has been in a strong position as the only “converged” operator offering fixed-line telecoms, broadband and mobile phone services, but the benefits of this position have started to slow as BT has failed to overcome regulatory, operational and competitive challenges.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BT Group PLC116.39 GBX4.57

About Author

James Gard  is content editor for Morningstar.co.uk

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