BT Group plc: does 250p per share represent good value for money?

Could BT Group plc (LON:BT.A) (BT.A.L) offer improving share price performance?




BT Group plc
BT Group plc

The BT Group plc (LON:BT.A) (BT.A.L) share price is currently trading at around 250p. Sure, it has experienced a significant rise in recent months, having hit around 203p earlier in the year. But I feel that it still offers good value for money.

One reason for this is that the company appears to be delivering on its refreshed strategy. Its most recent quarterly update showed that it has been able to reduce staff numbers at a time when it is seeking to cut costs in order to become more competitive. This could help to improve its financial prospects after posting three successive years of falling EPS. It is also focusing to a greater extent on customer satisfaction, which I feel could help to differentiate it further from rivals in what is becoming a more competitive quad play industry.

Further, BT has a P/E ratio of around 10 at the moment. Although there are some FTSE 100 shares which have lower ratings according to my research, I feel that the stock could be rerated upwards if it is able to deliver on its current strategy.

A new CEO is set to commence work in the new year. Alongside this, further EPS falls are expected over the next couple of financial years. Therefore, I feel that the company’s share price could remain under pressure in the near term, and may continue to be volatile. After all, it is a period of intense change for the business that could cause investors to remain cautious about its prospects.

Therefore, while I feel that there could be recovery potential on offer in the long run, and that the BT share price may offer good value for money at the moment, I believe that it remains relatively risky. Its near-term performance could be volatile after what has been an impressive number of months that have seen it outperform the FTSE 100.




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 info@investomania.co.uk or use one of the other contact methods available on the 'Contact Us' page