Three years ago the BT Group plc (LON:BT.A) (BT.A.L) share price was trading at around 465p. In the following months it would go on to reach almost 500p. Since then, it has dropped to as low as 204p, with it currently trading at around 257p.
In the last three years the company has experienced a hugely challenging period. It has released a profit warning, experienced accounting issues in Italy and made major changes to its business model as it seeks to compete in an increasingly crowded quad play industry.
It is now also in the process of changing its CEO, with Gavin Patterson having decided to stand down. He will be replaced in early 2019 by Philip Jansen. This could lead to further strategy changes in my view, with incoming CEOs normally seeking to refresh the business as they see fit.
As a result, I believe that the BT share price could continue to be volatile for a number of months. Even if the new CEO sticks to the current strategy, there are still major changes ongoing at the business.
They include significant headcount reductions as the company seeks to become leaner and more efficient. And with further investment in sports rights and pay-tv likely as the company seeks to improve its competitive position versus rivals, I believe it may take some time for the stock to recover to previous levels.
Therefore, I’m not anticipating a fast turnaround, but I do feel cautiously optimistic about the long-term prospects for the BT share price. In my view, it has the potential to improve its financial performance, but it faces a challenging market and investor sentiment that remains weak.
As a result, and while I think the stock could trade higher in three years’ time, I feel it could continue to be a risky and volatile period for the business.