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Should I snap up BT shares at 153p?

Dylan Hood — Tue, 30 Aug 2022 08:46:15 +0000

Like most stocks, BT (LSE: BT-A) shares have fallen in 2022. Down 11% year to date, the stock has seen its valuation fall largely due to rising inflationary pressures. Over 12 months, the stock is down 9.8%.

Regardless of the falling share price, I think that now could be a great time for me to buy BT stock. Let’s take a closer look at why.

Great value

At its current share price, BT trades on a price-to-earnings (P/E) ratio of 12.1. Although slightly above the ‘good value’ barometer of 10, it seems like a reasonably cheap valuation. When looking at BT’s nearest competitor, Vodafone, which trades on a P/E ratio of over 20, I see even more value in BT.

In addition to its value, it currently has a meaty 5% dividend, which is comfortably above the FTSE 100 average of 4. This could be great for adding passive income to my portfolio and helping me hedge against inflation.

BT is a big name in the telecoms industry, which is deemed a ‘defensive’ one. What this means is that it tends to fare well in times of economic turbulence. This is because (pretty much) everyone needs broadband, so the demand is always there. Also, due to the large amounts of pre-existing infrastructure that telecoms firms have, there’s usually less of a need for huge ongoing capital expenditure, which would increase in price with rising inflation.

There have been multiple forecasts of the UK economy entering a recession. As the economic climate worsens, stocks like BT could be in a good spot to weather the storm.

Poor results

Yet its share price performance doesn’t reflect this. Another reason why the stock hasn’t performed well this year has been due to its Q1 23 results. It reported that revenue rose 1%, but profits fell over 10% compared to the year before. A large chunk of this drop came from the group’s enterprise division, which has been suffering due to rising inflation putting pressure on B2B sales.

BT shares are also facing pressure from strike action. The Communication Workers Union (CWU) has been in talks with BT for some time surrounding pay packages. The firm had made a series of offers to the CWU, all of which were refused. Further strike action is set to take place because of this.

Strike action puts it between a rock and a hard place. If it doesn’t increase pay, operations are hindered, results are tainted, and the stock goes down. However, as it employs roughly 100,000 people, increasing pay means millions in extra costs. With thin margins, this isn’t something it can afford.

The verdict

Overall, BT shares look like a solid buy to me, especially in the current uncertain macro climate. Yes, it reported poor results and is in a dispute over pay. However, I feel the value, dividend, and future outlook of the firm outweigh these risks. As such, I’m looking to load up on BT shares at 153p.

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Dylan Hood has no position in any of the shares mentioned. The Motley Fool UK has recommended Vodafone. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

I’m using this FTSE 100 stock to help protect my portfolio from inflation

Dylan Hood — Fri, 05 Aug 2022 09:13:52 +0000

The last time I covered BT (LSE: BT-A), the stock was performing well. However, in the past 30 days, the share price has slid over 17%. Year to date the shares have fallen almost 10% and in the past 12 months, they’ve dropped almost 11%. So, with the share price at a dip, is now the time for me to add this FTSE 100 stock to my portfolio? With inflation on the rise, I think so. Let’s take a closer look.

Poor results

The recent fall in the BT share price can be attributed to its results released at the end of last month. The group reported a marginal 1% increase in revenue, which reached £5.1bn. It also revealed that its Openreach fibre optic broadband now covered over 8m homes and its 5G network covered 55% of the UK.

So, why have the shares fallen? Well, while revenues rose, profits fell by over 10% compared to the year before. Much of this drop was fuelled by the firm’s enterprise division that has been performing poorly in the last year. CEO Philip Jansen highlighted that the division would face “ongoing challenges” throughout the remainder of 2022 and beyond.

Inflation hedge

Although the firm’s profits have fallen, I think that the stock could be a great buy at the current share price. A primary reason for this is the current state of the UK economy. Inflation is still on the rise, reaching a sizzling 12.7% for June. Economists are predicting this trend to continue towards the back end of 2022 and into 2023.

BT has a huge number of assets in the form of pre-existing infrastructure, which is great at protecting it against rising costs. In addition to this, the company is a ‘defensive stock’. Even when the economy falls into recession — something looking ever more likely — people will be watching TV and making phone calls, so it will always have customers.

It also operates with a low price-to-earnings (P/E) ratio of just 12.4. Comparing this with competitor Vodafone, which has a P/E ratio of just under 20, I see great value. The meaty 4.9% dividend that BT shares offer is also comfortably above the FTSE 100 average of 3.7. This could be great for topping up my portfolio with some extra cash. Both of these factors encourage me to buy the stock.

Why I’m buying

In my opinion, the low valuation and inflationary hedge mark an attractive opportunity to add BT shares to my portfolio. The shares have been sliding due to sub-par results. However, in my opinion, the business is still well positioned for long-term success, especially when considering its impressive 5G and Openreach expansion. Therefore, I’m looking at opening a BT position in my portfolio in the near future.

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BT shares are up 12%: is now the time to buy?

Dylan Hood — Mon, 11 Jul 2022 12:04:49 +0000

BT (LSE: BT-A) shares have proved to be a great investment so far in 2022. They’re up 12% year to date, and 3% over the last 12 months. With markets looking increasingly uncertain, and the threat of recession looming, I think BT could be a great stock market play for me. Let’s take a look at why.

Valuing BT shares

Digging into BT shares’ value, I see a lot of positives. The company is super-asset-rich, which has provided a great hedge against inflation this year. Judging by BT’s most recent report, the value of its assets comes to just under £9bn. There are currently just under 10bn shares outstanding. Dividing these two numbers shows me that the value of BT’s assets adds up to around 90p of the share price. So in one way, I could say that if I buy BT at 193p, I’m buying it for 103p.

Judging the share price at this hypothetical 103p, the BT price-to-earnings (P/E) ratio falls to just 7.9 (almost half the current P/E ratio of 15). Comparing this to competitor Vodafone that currently trades on a P/E ratio of 21, I see huge value. Also, the current dividend yield is 4%, which could add a healthy passive income to my portfolio.

As mentioned above, BT’s abundance of infrastructure has helped it weather the storm of rising inflation. This is because having large amounts of pre-existing infrastructure means that operating cost exposure remains low. BT’s well-established customer base also helps it alter its prices in line with inflation, which can mitigate the risk.

The Q4 2022 results gave me confidence. The telecoms giant delivered on all of its strategic priorities with its 5G network now covering over 50% of the UK, and its Openreach ultrafast broadband now being installed in over 7m homes. This highlights to me the firm’s dominance in the sector.

A risky investment?

It’s not all perfect, of course. The biggest risk I see for BT is that it has over £20bn in debt on its balance sheet. Interest rates have been rising in order to keep inflation under control, and these rising rates could magnify BT’s debts. That being said, the firm announced that it expects free cash flow to rise by over £200m in 2023. This should help mitigate the risk of rising debt repayments.

The cost-of-living crisis could also place big pressure on BT shares. If it increases its prices too quickly, then it could force customers to turn to cheaper alternatives. It operates with a low 7% profit margin, so a substantial loss of customers would place big pressure on the firm’s profitability.

The verdict

Overall, I think BT stock offers me good value at the current share price. The healthy dividend and encouraging results reaffirm the strong investment case. Personally, I think that these positives outweigh the current risks, and hence I’m looking at adding a BT position to my portfolio in the near future.

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The BT share price has fallen 15% this year. I think now could be the time to buy

Rupert Hargreaves — Sun, 10 Nov 2019 10:24:43 +0000

It’s been tough to be a BT (LSE: BT.A) shareholder during 2019. Excluding dividends paid to investors, the stock has declined 15% year-to-date, underperforming the FTSE 100 by a double-digit percentage.

However, I think the company is starting to turn the corner and, for that reason, I believe now could be a good time for risk-tolerant investors to start building a position.

Tackling the problem

I’ve noted when I’ve covered the business in the past, for years BT has been putting profit over people. I reckon this is why the company has started to struggle recently.

With competition in the telecommunications sector growing daily, BT can no longer take its market share for granted. The group has to stand out in a crowded field, and it can’t do that with poor customer service.

Management has finally realised BT has been underinvesting and is planning to change that. Over the next few years, the group is expecting to spend hundreds of millions of pounds investing in call centres, new stores and tech teams to help customers around the country. On top of this, billions in extra capital spending is earmarked to upgrade BT’s infrastructure.

Will take time

Unfortunately, it will take some time for these efforts to flow through to the bottom line. In its half-year results, the company reported a 2% decline in revenue and a 3% dip in earnings before interest, tax, depreciation and amortisation. Although overall costs increased by 18%, efforts to streamline the business in some areas helped offset the rising cost of doing business for the firm.

BT believes it would cost £25bn-£30bn to roll-out full-fibre broadband to every home in the UK, which the company cannot afford by itself. Management is hoping for some government support. Still, even then, City analysts believe the business will ultimately have to reduce its dividend to shareholders to meet capital spending promises.

With this being the case, I’m hesitant to recommend BT as an income investment at current levels, even though the stock does currently support a market-beating dividend yield of 7.4%.

Reducing the dividend by 50% would free up an extra £750m per annum for the company to invest back in business.

Growth investment

Overall, I think the stock has a much brighter future as a growth investment. Right now, shares in BT are trading at a depressed 8.5 times forward earnings, which reflects the deflated market sentiment towards the business.

However, if growth returns, I don’t think it’s unreasonable to suggest the stock could return to the sector-average multiple. If this occurs there could be an upside of as much as 35% on offer for investors from current levels.

So, with a potential return of 35% on offer if BT does return to growth, this could be an attractive buy for risk-tolerant investors with a long term investment horizon, who aren’t too concerned about dividends.

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Rupert Hargreaves owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The BT share price: is it time to buy ahead of the company’s turnaround?

Rupert Hargreaves — Thu, 10 Oct 2019 08:39:10 +0000

For a long time, I’ve recommended investors avoid the BT (LSE: BT.A) share price. The company’s debt, poor customer service record, and growing competition in the UK’s telecommunications sector are all red flags, in my opinion. However, yesterday the company published its plan to “boost” its UK business and, following the release of this update, my opinion of the group is starting to change.

Putting the customer first

I’ve long thought that the first place BT needs to look if it wants to return to growth is customer service. Of the 5,000 people who have left a review of the company on Trustpilot.com, 90% gave the business a one-star rating. By comparison, TalkTalk has an average rating of three stars with 36% of the 40,000+ reviewers giving it five stars.

The good news is, BT’s managers seem to have realised customer service is lacking, and the “boost” plan is designed to change that. First off, the firm is accelerating a plan to return all of its call centres to the UK and Ireland by January 2020. That’s a year ahead of schedule. It’s also planning to answer customer service calls in the service centre closest to the customer, whenever possible.

On top of this, the company is planning to transform 600 EE stores into dual-branded BT/EE stores across the UK. According to BT’s own estimates, this will put 95% of the UK population within 25 minutes drive of receiving personal help from a BT assistant.

And that’s not all. The group is also planning to train up a team of 900 experts for a “Home Tech Team” to help customers with tech in their homes. A new team of Tech Experts for small business customers is being trained up as well.

Also in the works are BT-sponsored community training centres for digitally excluded people, as well as other initiatives the company believes will help bring digital skills to more than 10m people by 2025.

Improving infrastructure

On the infrastructure side, BT said yesterday it will be upgrading 700,000 homes and businesses to superfast broadband by the summer of next year, at no extra cost. It will be one of the first mobile providers in the UK to launch 5G mobile plans and is planning to connect 15m homes and businesses to full-fibre broadband by the mid-2020s.

It’s encouraging to see that BT has finally decided to take these bold actions. Management seems to want to build the brand into something that people can trust.

Funding for the customer service strategy has already been earmarked with the £250m-£350m pot set aside in BT’s latest results. The roll-out of fibre might cost a bit more, however, and management has warned a dividend cut might be needed to fulfil its promises.

Conclusion

Overall, I think this is a big step in the right direction for BT, but I’m not a buyer of the stock just yet. The firm still has a mountain of debt to deal with and pension obligations that eclipse the market capitalisation of most FTSE 100 firms.

But if that’s something you are willing to overlook, then now could be the time to buy the BT share price as the company gets going on its efforts to restore customer confidence and turn the business around.

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Why the BT share price rose 8% in September

Rupert Hargreaves — Tue, 01 Oct 2019 09:22:43 +0000

Shares in BT (LSE: BT.A) jumped 8% in September outperforming the FTSE 100 by 5% excluding dividends.

Unfortunately, despite this positive performance, the stock is still underperforming the market year-to-date. Shares in BT are down around 25% excluding dividends since the beginning of 2019, compared to a gain of 10% for the FTSE 100.

Still, it looks as if market sentiment towards the business is finally starting to change. At the end of August, buyers began to return, and since August 23 the stock is up 13%, outperforming the FTSE 100 by 10%.

The question is, has BT finally started to turn a corner or is the recent performance just a bubble that could soon pop?

Company turnaround

Unfortunately, the BT share price has been rising without any significant news flow. That suggests that this rally is based on nothing more than hot air.

BT has been trying to restore investor confidence in the business since the beginning of 2018 after the stock hit a six-year low on weak earnings. These problems cost former CEO, Gavin Patterson his job.

The company is now trying to position itself for the 21st century. The telecoms group has agreed to sell its London HQ near St Paul’s Cathedral for £210m as part of this plan, as well as putting several regional properties on the block.

BT is also slashing 13,000 jobs across the group and is promising to invest billions in rolling out fibre broadband to homes across the UK.

Still, as I’ve mentioned above, it is too early to tell if these efforts to turn the group’s fortunes around are starting to work. BT’s latest set of results showed a 5% decline in earnings before interest, tax, depreciation and amortisation for its fiscal first quarter.

Overall revenue declined 1% year-on-year to £5.6bn, with profits before tax down to £642m from £704m a year earlier because of higher costs. For the full year, City analysts are expecting earnings per share to decline 14%, the firm’s fourth consecutive year of falling profits.

Too early to tell

Based on all of the above, I think that while shares in BT look cheap, the group’s outlook is still shrouded in uncertainty. That makes it difficult to recommend the stock right now.

Indeed, shares in BT are currently dealing at a forward P/E of just 7.3 and support a dividend yield of 8.5%, but with the company warning that it could cost as much as £30bn and require an additional 30,000 workers to deliver full-fibre broadband nationwide by 2025 (as promised by the government) there’s no guarantee that BT’s earnings won’t fall further from current levels. The additional cash requirement could also force management to slash the firm’s dividend.

The bottom line

So overall, while the BT share price beat the market in September, I think it’s unlikely that this performance will continue. The company’s outlook is just too uncertain and, as of yet, we don’t know if BT’s turnaround efforts will bear fruit.

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Is the BT share price a bargain buy or value trap?

Rupert Hargreaves — Sun, 08 Sep 2019 12:15:25 +0000

The BT (LSE: BT.A) share price looks like an attractive investment at current levels. Shares in the UK’s largest telecommunications company have fallen 30%, excluding dividends, this year and, following this decline, the stock is trading at a forward P/E of just 6.8. A dividend yield of 9.1% is also on offer at the time of writing.

While I’ve advised against buying BT in the past, even I’m attracted to this low valuation. Indeed, it’s one of the lowest ever placed on the stock.

The lowest valuation

To try and understand whether or not the stock is a bargain buy or value trap, we first need to work out why the market is placing such a low value on the shares. The most obvious reason is growth, or rather a lack of growth. The group reported a 1% year-on-year decline in overall revenue for the first quarter and pre-tax profit declined to £642m, from £704m a year earlier, because of higher costs.

These numbers have reinforced City expectations that earnings per share will fall 15% for fiscal 2020. If profits do decline by that number, it will be the 4th year in a row. That deserves a lower-than-average valuation.

Analysts are currently expecting growth to return in the 2021 financial year. It’s difficult to tell at this point if the firm will meet these figures. Analysts are only expecting growth of 3%, but if BT misses this target, it will be the fifth year in a row the company has had to unveil falling returns to shareholders.

Struggling for growth

I’m sceptical the group will be able to return to growth. BT has one of the worst reputations in the telecoms market, particularly among customers. When it dominated the market, this wasn’t a problem but, as competitors have started to take market share, BT’s poor customer service is dragging down returns.

The hundreds of additional job cuts management is planning in an attempt to improve group profitability is unlikely to improve relations with customers. Therefore, I think it’s highly likely customers will continue to flock to competitors, sapping BT’s sales further.

To keep up with competitors, the company is also having to ramp up capital spending. Chief executive Philip Jansen has admitted the business will have to spend £400m-£600m extra a year to meet the firm’s goal of connecting 15m homes to full fibre broadband by the middle of the next decade. A dividend cut has been touted as a solution to freeing up capital for this ambitious target.

The bottom line

So overall, shares in BT might look cheap, but the company’s lack of growth and increasing competition in the UK telecoms market is concerning. The business is going to have to spend more to remain relevant and this may mean the 9% dividend yield is under threat.

With £12bn of net debt, excluding the company’s pension deficit, BT’s balance sheet is also fragile, limiting flexibility. As a result, I think it may be better to watch this one from the sidelines rather than try and take advantage of its low valuation today.

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Forget the BT share price, I’m buying this FTSE income champion instead

Rupert Hargreaves — Sun, 04 Aug 2019 10:00:54 +0000

At the time of writing, shares in BT (LSE: BT.A) are dealing at a forward P/E of just 7.8, supporting an attractive dividend yield of 7.8%. For income investors, this level might be too hard to pass up, but I think you should stay away.

You see, I’m sceptical BT can maintain its current dividend because the telecoms giant needs to invest more to grow its business and retain customers. This is something management has commented on as well. Back at the beginning of July, chairman Jan du Plessis said management will consider reducing the dividend in “a year or two in the future” depending on its capital expenditure commitments.

The company says it will also look at cutting costs and borrowing more to help fund the expansion of its fibre broadband network over the next few years. BT’s promise to bring full-fibre broadband to 15m two households across the UK will cost between £400m and £600m a year, according to its own forecasts.

Upcoming cut

With the threat of the dividend cut hanging over the BT share price, I don’t think it’s worth buying the shares at current levels. As well as the threat of a dividend cut, there’s also the company’s high level of indebtedness to consider, ginormous pension deficit (bigger than the market capitalisation of most FTSE 100 firms), and competition.

So, I would forget the BT share price and invest my money instead in UK insurance group Admiral (LSE: ADM). Compared to BT, I think Admiral is firing on all cylinders. The company is expanding its presence at home here in the UK, and investing heavily in growing out is overseas businesses. These are expected to break even for the first time in the next year or so.

These overseas businesses, coupled with the fact Admiral is one of the most efficient general insurance companies in the country, are the reasons why I like this business so much. Specifically, Admiral’s return on equity — a key measure of profitability — was 56% for its 2018 financial year. Its closest competitor, Direct Line, reported a return on equity of just 18%.

Admiral is also branching out into financial services, having recently launched a loan product. This division is still unprofitable, but it is yet another string to the company’s bow that will help power growth in the years ahead.

Dividend champion

Admiral is hugely profitable, and the company is returning the majority of its excess profits to investors with dividends. The company tends to pay out a combination of both regular and special dividends, which analysts believe will total just under 130p per share for 2019. Based on this forecast, the stock supports a forward dividend yield of just under 6%.

So overall, Admiral’s dividend yield is lower than the level of income offered by BT, but I believe the company’s growth prospects are vastly more attractive. That’s why I would forget the BT share price and buy Admiral for my portfolio today instead.

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Rupert Hargreaves owns shares in Admiral Group. The Motley Fool UK has recommended Admiral Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Could the Vodafone share price become the next BT?

Rupert Hargreaves — Sat, 13 Jul 2019 08:00:33 +0000

The Vodafone (LSE: VOD) share price has been a disappointing investment over the past three and five years, but the company’s performance is significantly better than peer BT (LSE: BT.A).

Over the past five years, including dividends to investors, the Vodafone share price has returned 0.06% per annum, underperforming the FTSE 100 by 6.7% per annum. This return is pretty weak, but it’s not as bad as the performance suffered by shareholders in BT.

Over the past five years, shares in BT have underperformed the FTSE 100 by around 14% per annum, and over the past three years, the stock has underperformed the UK’s leading blue-chip index by 25%!

The question is, could Vodafone’s shareholders suffer the same fate? Today, I’m going to try and answer that question.

Trouble ahead?

While Vodafone and BT are different companies they both have similar problems. They have a mountain of debt and are struggling to grow in the increasingly competitive telecommunications market.

To its credit, Vodafone has been more proactive when it comes to cleaning up its balance sheet. Back in May, the company cut its full-year dividend by 40%, freeing up cash to invest in building out its European 5G network and pay down debt. Its dividend payment of €4.1bn a year was one of the biggest in the FTSE 100 until the reduction.

This is a small step in the right direction and it is part of a much bigger plan. Vodafone has €27bn of net debt and is also planning to pay €18.4bn in a deal to acquire Liberty Global’s German and eastern European cable assets. To reduce liabilities, management has several asset sales and spin-offs in the works, which should chip away at the group’s obligations before they get out of hand.

By comparison, BT hasn’t cut its dividend and is struggling to reduce debt. Further, the company is under pressure from regulators to increase its investment in fibre networks, which has lagged competitors for some time. BT’s lack of spending means the business is losing market share to more agile players in the UK telecoms market, including Vodafone.

Meanwhile, Vodafone is Europe’s most significant fixed-line player with 54m customers on its network and biggest TV distributor with 22m subscribers. The company has invested £19bn in its systems since 2013.

The better buy

Considering all of the above, I would say Vodafone is a better buy than BT and will remain so. The company’s pro-active approach regarding its dividend and balance sheet is, in my mind, a big positive. And while the stock’s dividend yield has fallen substantially after the cut, it’s still a highly attractive 6.7% compared to BT’s 7.9%.

Shares in Vodafone are also cheaper than those of BT on a cash flow basis. The stock is trading at a price to free cash flow ratio of just 8.2, compared to BT’s multiple of 33. All in all, it looks to me as if Vodafone is the better buy, if you’re after income and capital growth over the long term.

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The BT share price: Here’s what I’d do now

Rupert Hargreaves — Sun, 23 Jun 2019 08:00:27 +0000

Investors tend to buy blue-chip stocks because they’re dependable and predictable. Blue-chip FTSE 100 companies might not be as exciting as their small-cap peers but, most of the time, you can depend on them to give you a predictable income stream from dividends as well as steady capital growth over the long term.

That’s the theory anyway. Unfortunately, over the past four years, the BT (LSE: BT.A) share price has proven itself to be the exception. The stock has consistently underperformed the FTSE 100, losing 19.2% in 2016, 21.8% in 2017, 6.8% in 2018, and it’s down 18.6% this year.

In total over the past five years, including dividends paid to investors, the BT share price has underperformed the FTSE 100 by 12.6% per annum — that’s a huge gap.

After these declines, shares in the UK’s largest telecommunications group are dealing at a forward P/E of 8.4, and support a dividend yield of 7.3%. These metrics look too good to pass up. However, the way I see it, it’s difficult to tell at this point if BT’s problems are now behind it, or if there could be further issues ahead for the business.

More pain to come?

One of the reasons why investors have been dumping shares in BT over the past three years is the fact the company’s dividend looks unsustainable, based on current trends. Right now, the firm is spending more than it can afford on both shareholder distributions and capital spending. As a result, net debt has nearly doubled, and the group’s pension obligations have ballooned to a colossal £5bn.

I believe the company will have to cut its dividend at some point if this trend continues. Management has already warned BT could cut its dividend “at some stage in the future” to help fund its ambitious fibre broadband expansion.

Based on these comments, it seems as if it’s a case of when, not if, BT will cut its dividend. And when a dividend cut is announced, I reckon the stock could fall further, as now it seems as if the dividend is one of the only things supporting the BT share price.

Growing out of a slump

As well as a possible dividend cut, BT earnings are also set to fall in the years ahead. Indeed, analysts have pencilled in a decline of 14% in earnings per share for the current financial year. While the City is expecting the group to return to growth the year after, considering the fact the company’s earnings have fallen since 2016, I want to see more concrete progress before trusting this optimistic forecast.

If BT can prove to the market it has returned to growth, then I think it will be worth reconsidering the opportunity here. However, until growth returns, I see limited upside for the shares from current levels.

Even though the stock looks cheap, I think it’s cheap for two reasons. The company isn’t growing and it has too much debt. Until management can solve these issues, BT will remain a ‘sell’ in my eyes.

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