Is BT Group plc set to rise or fall over the next 12 months?

Does BT Group plc (LON:BT.A) (BT.A.L) offer improving share price prospects?

BT Group plc
BT Group plc

While the BT Group plc (LON:BT.A) (BT.A.L) share price has delivered significantly improved performance in recent months, it is still down by around 12% over the last year. This shows how challenging the early part of 2018 was for the telecoms company, with it experiencing a severe fall in its stock price.

Having announced a refreshed strategy part-way through 2018, though, investor sentiment towards the company has improved. Investors seem to have begun to factor in the possibility that cost cuts and improving efficiencies could stimulate the company’s sales and profit prospects over the medium term. And with a refreshed management team set to commence work in the very near term, it could be argued that the outlook for the company is improving.

In my view, though, there is a still a long way to go until BT has recovered from its disappointing performance over recent years. Its share price is still less than half of where it was just over three years ago, while it is expected to report further declines in EPS over the next couple of years.

Further, while it has started to implement a refreshed strategy, it could be subject to change under a revised management team. Additional changes could be good for the long-term prospects of the business, but implementation costs in terms of time and capital may lead to further volatility in the company’s performance.

Therefore, I think that the BT share price could experience further volatility over the next 12 months. I feel that it has the potential to deliver improving financial and investment performance over the long run. However, it may take time for the business to deliver on its potential as it implements a new strategy under a revised management team in what is an uncertain operating environment and volatile stock market.

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