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With the BT Group (LSE: BT.A) share value sitting at round 185p, a forecast above 300p might sound a bit far-fetched. It could suggest a achieve of round 60% — after BT shares have already risen near 30% in 2025. However it’s across the top quality of dealer value targets in the mean time.
To attempt to be maybe a bit extra real looking, the newest targets are extra within the 215p-220p vary. However that will nonetheless imply a value rise of 15%-20%. And these targets are comparatively quick time period anyway, so possibly not near the place analysts suppose the BT share value may go over the total yr.
Examine the worth
Trying nearer at dealer forecasts, we see BT shares on a ahead price-to-earnings (P/E) ratio of round 14. And which may not precisely sound like a screaming Purchase valuation. Earnings progress is barely predicted to be modest, so it’s arduous to place a progress inventory premium on the valuation based mostly on that.
However for me, the essential factor to take a look at with BT is money move. And, critically, with BT’s broadband rollout speeding each nearer to completion, capital expenditure ought to be falling. One thing like two-thirds of UK houses at the moment are reached by fibre-to-the-premises, and the identical quantity have 5G cellular protection.
As this all nears completion, hopefully it ought to depart additional cash free for enhancing the dividend — nonetheless on a good 4.4% forecast yield, even after the share value enhance of 2025. At full-year time in Could, BT confirmed its “progressive dividend coverage which is to keep up or develop the dividend annually“.
Depend the money
So what’s BT saying about its money expectations?
At first-half outcomes time in November, CEO Allison Kirkby mentioned: “We stay on monitor to ship our monetary outlook for this yr, our money move inflection to c.£2.0bn in FY27 and c.£3.0bn by the tip of the last decade, and we’re asserting an elevated interim dividend to 2.45 pence per share.”
To place that into context, BT reported £1.3bn normalised free money move for the 2024 full yr. So we’re trying on the prospect of that hovering by 130% over the course of six years. Perhaps short-term P/E predictions aren’t at all-time low. However these sort of money move prospects make me take a look at bold share value targets with a extra optimistic view.
Watch the debt
Saying that, I do suppose modest earnings per share (EPS) forecasts might maintain the BT share value again. If slowing expenditure doesn’t begin lifting EPS quickly, these money move targets may look much less achievable. And web debt of £20.9bn might make buyers nervous too.
So what of these value targets? I reckon the higher finish of over 300p could possibly be too bold. The latest 215p-220p suggestion appears extra real looking to me. However we’d must hope the shares don’t fall again once more, as they have an inclination to do in cycles. Total, I price BT as price contemplating for its long-term prospects.
