Will the BT Group plc share price ever return to its 2015 high?

Does BT Group plc (LON:BT.A) (BT.A.L) offer recovery potential after a tough period?

BT Group plc
BT Group plc

In 2015, the BT Group plc (LON:BT.A) (BT.A.L) share price reached almost 500p. That was its highest level since the year 2000. Since then, though, it has fallen to a low of just over 200p per share before rising to its current level of around 250p.

While it has gained nearly 50p in recent months, it remains at around half the level it reached in 2015. That’s clearly disappointing for the company’s investors, and shows that there is a very long way to go until it can be considered ‘recovered’.

One challenge facing BT in my view is its financial performance. Ultimately, I feel that it has been unable to deliver the expected financial improvement following the investment of £billions in sports rights, pay-tv and mobile in recent years. In fact, it is due to post falling EPS in the next two years after three years of EPS declines.

Its recent results showed there has been a lack of growth in the most recent quarter. Although the update showed that there has been progress made in reducing headcount and in making the business more efficient in my view, I believe that it could take time for the business to deliver sustained EPS growth.

With investors ultimately seeking EPS growth in my opinion, I feel that the BT share price could remain relatively volatile in the near term. A change in CEO may bring a refreshed strategy and fresh impetus, but ultimately I believe that the stock could take time to successfully turn itself around.

Since it trades on a P/E ratio of around 10 and now has a sound strategy in my eyes, I think there is scope for an improved share price performance in the long run. But in the short term, I feel that a tough financial outlook may weigh on its share price prospects.

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