Is BT a better recovery share than Centrica, easyJet and Rolls-Royce?

Could the BT Group plc (LON:BT.A) (BT.A.L) share price outperform the share prices of easyJet plc (LON:EZJ) (EZJ.L), Centrica PLC (LON:CNA) (CNA.L) and Rolls-Royce Holding PLC (LON:RR) (RR.L)?

BT Group plc
BT Group plc

BT Group plc (LON:BT.A) (BT.A.L) has experienced a difficult 2017 so far. There has been an investigation into its Italian operations and a profit warning. This has caused its share price to fall by approximately 15%.

It’s not the only company which is experiencing a difficult period. For example, easyJet plc (LON:EZJ) (EZJ.L), Centrica PLC (LON:CNA) (CNA.L) and Rolls-Royce Holding PLC (LON:RR) (RR.L) all have challenges which they are attempting to overcome.

In the case of easyJet, falling demand and higher supply has hurt its financial performance. Centrica is attempting to pivot towards being a more focused energy supply company, while Rolls-Royce is seeking to drive through large cost savings to become more efficient.

In my opinion, the BT share price could register a turnaround. I think its current strategy may be successful in the long run. I feel the acquisition of EE may be a good move by the business and may lead to improved returns in the long run from synergies. I also feel the investment in sports rights will help to differentiate BT versus other sector peers and this could improve its share price performance.

The quad play sector has high competition. However, BT has cross-selling opportunities which may lead to robust sales and margins. Since its acquisition of EE, it is a relatively dominant player within the sector and this could lead to improved performance versus its peers.

In my view, easyJet, Centrica and Rolls-Royce will make successful comebacks. easyJet’s budget offering and efficient business model could allow it to outperform its peers. Although I think the Oil & Gas industry could enjoy a bright future, the cost savings being generated by the changes in Centrica’s business model could drive its share price higher. Similarly, Rolls-Royce may benefit from an improving defence sector.

Therefore, I’m optimistic about all 4 shares and feel BT could perform relatively well due to its good strategy and growth potential within the quad play space.

About Robert Stephens 3137 Articles
Robert Stephens is a CFA Charterholder and an Equity Analyst by trade. He is a passionate private investor who has been buying and selling shares for many years, owning a wide range of UK shares in the process. He has written for Citywire and The Motley Fool US and now runs his own business. To contact Robert, please email or use one of the other contact methods available on the 'Contact Us' page