Can BT's share price reach 200p in the next year? Here's what the experts say
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It's been a great year BT (LSE: BT) share price. I FTSE 100 The telecoms giant has cleared most of its woes and is up 23.63% over 12 months.
That's a great reward for investors who decided that BT Group had suffered enough, and it was time to take a punt. BT shares are down 29.09% over five years. So long-term investors are still hurting, even though they've made fewer gains during that time.
Like many companies, BT has suspended shareholder payments during the crisis. However, the fees quickly increased. paid a dividend of 5.47 %. Let's see what the chart shows.
Chart with TradingView
Even better, analysts predict those dividends will continue to rise – to 8.16p per share in 2025, 8.4p in 2026, and 8.65p in 2027. Meanwhile, the yield is forecast to be 6.1%.
This FTSE 100 stock can fly
At this rate, BT investors can double their money in less than ten years, even if the share price does not grow at all. But what if it happens?
Today, BT shares are worth 146.7p each. The pace of the recovery has slowed recently, as it increased by just 3.69% in three months. They don't look cheap, however, with a price-to-earnings ratio of just 7.91. That's about half the FTSE 100 average of 15.4 times.
And they look cheap measured by their price-to-sales (P/S) ratio of 0.7. This suggests that investors are paying 70p for every £1 of sales made by BT.
BT still has a lot of debt, and there are no signs of that decreasing in the near future. It is forecast to reach £20.3bn in 2025, and reach £20.27bn in 2026. It also has a large pension scheme deficit. These are the two main reasons why the stock looks cheap for a long time (there is always a reason).
With operating margins of 10.6% and a return on equity of 9.5%, BT is doing well but not great. So what is the idea?
Analysts are incredibly excited
Rather positive, given the 13 analysts providing one-year price forecasts for BT Group. They set an average target of 200.4p. If they're right – and loyal BT investors will be hoping they are – that's an impressive 37.02% increase today. Throw in a 5.7% weather yield and the total return is up to 45%.
As always, predictions are a moving deal. There's a huge range there, from a low of 110p to a high of 290p. The latter will see BT's price double.
Senior Allison Kirkby has made a strong start but has some tough targets to hit. Can the company really cut 55,000 jobs by the end of the decade? That's 40% of its workforce. Artificial Intelligence will have to struggle here.
Another big thing is that Kirkby says he hit it “inflection point” such as investment in its fully wired Openreach network. The downside is that it faces competition from smaller broadband providers.
The low BT rating, high yield, and improved vision are all very tempting. It's risky but I like the look of those dealer forecasts and will buy one when I have the money.
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