Is BT Group plc’s share price set to hit 300p?

Could BT Group plc (LON:BT.A) (BT.A.L) continue to make further share price gains?

BT Group plc
BT Group plc

The BT Group plc (LON:BT.A) (BT.A.L) share price has enjoyed strong growth in recent weeks. It has gained around 15% in less than two weeks, which suggests that investor sentiment is improving.

The gains made by the stock have coincided with what I viewed as a relatively positive update released by the company. It showed that it is making progress in implementing its strategy, with around 2,000 roles having been made redundant already. A further focus on efficiency and customer service could lead to a stronger business over the medium term in my view.

With a new CEO set to start work in early 2019, I feel that the company could experience further volatility in the near term. I wouldn’t be surprised if there are further strategy changes ahead, since a new CEO often seeks to make their own mark on the business. From my perspective, though, the current strategy appears to be working well so far.

The BT share price would need to rise by around 13% to reach 300p. In my opinion, that could be achievable over the medium term. After all, the company has a P/E ratio of around 10, as well as a dividend yield that is approaching 6%. Therefore, I would still argue that it is relatively cheap at the moment, and could have upside potential.

That said, the company’s EPS growth forecasts remain relatively downbeat. Its bottom line is due to fall this year and next year following three years of declines, with recent results showing that its financial performance remains relatively lacklustre compared to some of its industry peers.

In my opinion, BT has the potential to deliver growth beyond 300p over the long run. However, it continues to face an uncertain outlook which means it stock price could be volatile in future months.

About Robert Stephens 5151 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 [email protected] or use one of the other contact methods available on the 'Contact Us' page