Does BT Group plc have an improving investment outlook?

Could BT Group plc (LON:BT.A) (BT.A.L) deliver a rising share price?

BT Group plc
BT Group plc

The performance of the BT Group plc (LON:BT.A) (BT.A.L) share price in recent months has been encouraging in my view. While the FTSE 100 has experienced a disappointing period that has seen it decline to the same level at which it traded almost 20 years ago, the telecoms company has reversed a portion of its stock price decline of recent years.

Undoubtedly, there is a very long way to go until it is recovered from three years of stock price declines. But I feel that after dropping by almost 300p, a recovery of some sort is welcome from an investing perspective.

In the short run, I wouldn’t be surprised if the company’s shares experience a period of instability. Various changes are being made to its business model at the moment, not least a change in CEO. From my experience, this can lead to a company being taken in a slightly different direction in terms of its strategy, with a new CEO seeking to make improvements and changes to various part of the business.

This could cause investor sentiment towards BT to come under a degree of pressure in my opinion. Investors may become more cautious after various strategy changes have ultimately failed to deliver improving EPS growth in recent years.

Still, I feel that good progress is being made under its new strategy. There have been cost reductions and the company has been able to reduce its headcount while seeking to improve the customer experience. This could strengthen the financial performance of the business in the long run at a time when the quad play industry is becoming more competitive.

With the BT share price having a P/E ratio of around 10, I think it offers good value for money. And while I do think it has an improving investment outlook, at the same time I feel that there could be some challenges ahead in the near term.

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