Is the BT Group plc share price set for further volatility?

Could uncertainty rise for the BT Group plc (LON:BT.A) (BT.A.L) share price?


It’s been a rollercoaster year for the BT Group plc (LON:BT.A) (BT.A.L) share price. Having started the year at around 249p, it quickly rose to a 2018 high of 277p. Then, though, investor sentiment came under severe pressure and pushed the stock down to 203p at its lowest level in May. Since then, there has been a strong recovery, although this has been subject to a significant amount of volatility.

Of course, some of the volatility in the company’s shares has been down to wider uncertainty in the FTSE 100. The index has experienced a ‘year of two halves’, with it making strong progress until May, before recording a severe correction from which it has not yet recovered.

In terms of BT’s prospects, I wouldn’t be surprised if there are further ups-and-downs for the company. It is in the process of making major changes to its business model, with significant staff cuts and a focus on cost reduction being a central part of this. Although I feel it is making progress in putting the changes into practice, as with any stock investors can become less confident during periods of upheaval.

Additionally, the company is expected to report further declines in its EPS over the next couple of years. And with a new CEO starting work in the New Year, its strategy could even be refined further.

With a P/E ratio of around 10, I feel that the BT share price could offer good value for money at the moment. Compared to a number of FTSE 100 shares, it seems to offer a margin of safety in my eyes.

At the same time, though, risks remain high according to my research. Therefore, I’m cautiously optimistic about its prospects, and feel that volatility may remain high over future months as it seeks to make significant changes to its management team and strategy.

About Robert Stephens 5430 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