Bt Share Discussion Threads

[kmann] 26/7/2018 08:29

Amazing start. Most investors were just waiting for a bit of clarity, and some soothing talk from BT and ofcom. Nice and steady rise.

The technicals are swing round to a buy phase. All the corrupt hedge funds flipping the switches to BUY

[hamhamham1] 26/7/2018 08:22

That RBC broker update was actually very positive, it gave a 275p target and said that BT are tackling their issues.

[kmann] 26/7/2018 08:09

Looking for that continued move up toward Toothurty!

[kulvinder] 25/7/2018 16:46

Sorry meant to divi cover.

[kulvinder] 25/7/2018 16:46

Hamham, according to that then BT has the best cover.

[hamhamham1] 25/7/2018 16:15

Compound interest is your fwiend 👍. (You know, that rich one with the nice life)

[iceman82] 25/7/2018 15:40

no tax to be paid , shares are on isa

[montyhedge] 25/7/2018 15:30

I suppose it depends on your tax position, nice problem to have, lol.

[iceman82] 25/7/2018 15:24

only 10 days till ex divi date and i should get 5.1% return price should start to rise soon..., still unsure whether i will go for divi or capital gain....any advice?

[careful] 25/7/2018 15:03

I am beginning to think that the share price does not matter.

What matters to the long term investor are fundaments and dividend stream.

[kmann] 25/7/2018 14:38

Sector was written off thanks to ofcom, but now we all know the roadmap ., time to take your positions imo. Fiber is the life blood of the digital age. Expect a load of teaser deals, customer growth, then price hikes.

These brokers are pretty useless, lack vision, completely absorbed and believe in their own image. They are well behind the curve, but when you think about it, publicly they have to be in order to load up and sell to their clients before they go public with an upgrade, then its all "look at me, I'm brilliant at making you all money" ... so on so forth!

Buy, hold, wait for the technical traders guys, once the needle hits BUY-100% they will come

[holly1000] 25/7/2018 13:43

Dodgy brokers downgrading a share as it starts Rising ?why ? Because they're short in this stock no doubt!! I thought market manipulation was illegal how can these brokerage companies get away with it so blatantly ?

[hamhamham1] 25/7/2018 12:28

toon. I'll take 250p for now. This is just the start I think of a well-overdue shake up in the historic legacy operating costs. There was never a real need for such high costs, they have just never been tackled before.
Give it a year or two and better direction from above, better work ethos from adopting EE approach and better P&L's - then we all will be smiling.

[toon1966] 25/7/2018 12:22

Interesting point Ham but suspect RBC are just falling into line with everyone else! Jefferies yesterday reiterated their buy with a price target of 250p which is lower than RBC!!


FTSE is substantially down today and Trumps tariffs now beginning to hurt US farmers and automotive industry big time!

[hamhamham1] 25/7/2018 12:03

This is probably why BT's fall today?
(on a positive side, even with this price re-rate, it still means a 25% upside to the share price from here) :)
And they do acknowledge that BT are tackling the issues, so that's good, but you can't expect all the issues to be resolved in a couple of months, I am happy with the progress to date.

BT has 7% dividend yield but lack of catalysts lead to RBC downgrade

RBC cut its rating on BT to ‘sector perform’ from ‘outperform’ and lowered its target price to 275p from 385p.

BT Group plc (LON:BT.A) has a successfully dealt with a number of overhanging issues but there are few catalysts to re-rate the stock in the next year, RBC Capital Markets said.

RBC downgraded the stock to ‘sector perform’ from ‘outperform’ and lowered its target price to 275p from 385p.

In reaction, shares fell 1.7% to 219p in late morning trading.

“Although BT is underpinned by a 8% free cash flow yield, a 7% dividend, and potential convergence benefits, we see few catalysts to re-rate the stock in the next 12 months," RBC said.

Lack of catalysts
RBC pointed out that BT is yet to confirm a replacement for outgoing chief executive Gavin Patterson, who leaves at the end of the year.

READ: BT boss Gavin Patterson to step down later this year
The broker thinks BT’s strategic position could allow it to use convergence to stop line loss and neutralise the threat from alternative networks but the company’s attitude of “safety first” and incremental approach mean this is likely to take several years before it becomes mass market.

BT’s convergence plans involve combining broadband, mobile and pay-TV as a single service and bill.

RBC also highlighted that BT expects a £1bn headwind over the next three years as a result of stricter regulation that forces the company to lower wholesale prices for its Openreach network.

This will mean lower input prices for competitors, allowing them to cut retail prices to compete with BT.

New KPIs 'may cause concern'
RBC said BT's new key performance indicators that it will use from the first quarter of 2019, do not provide details on broadband or mobile net adds.

“While we understand the desire to move away from 'net adds' as the market matures, not disclosing such important metrics may cause concern, given the widely held sceptical view that companies tend to obfuscate bad news,” RBC said.

“Indeed, reduced disclosure often, in our view, portends badly for future operational performance.”

Dealing with overhanging issues
More positively, BT has navigated through a period of regulatory uncertainty.

The company has settled its dispute with the Ofcom over the structural separation of Openreach and survived the government’s Wholesale Local Access review.

Another issue BT has dealt with is its pension scheme. Following the completion of its triennial pension review, it is swapping £2bn of pension deficit for financial liabilities via a bond issue to the scheme.

"BT has successfully dealt with a number of issues that have been overhanging the stock for the past 18 months," RBC acknowledged.

It added: "Having done the "hard yards", and with a 7% dividend, one could expect some easing of the environment and a potential relief rally (esp. if defensive stocks come back into vogue). However, we are hard pressed to find any catalysts that could cause the market to reassess BT's prospects in the next 12 months."

investors.co.uk/companies/news/201543/bt-has-7-dividend-yield-but-lack-of-catalysts-lead-to-rbc-downgrade-201543.html

(remove the space between proactive and ivestors to restore the link)

[knowing] 25/7/2018 11:57

When he sold :-)

[toon1966] 25/7/2018 11:23

I see you've changed your tune on the BT dividend Monty, when did this happen?

[hamhamham1] 25/7/2018 11:20

Monty. Hard to tell if levels are right with low share prices currently? - although its not really about the share price level to calculate the divi cover. (But going by the current cover ratio, then if anyone can justify it in the FTSE100, it's BT)
If BT can get the savings/efficiencies through (thus upping the EBITDA) and even if after the recent discounts announced by Openreach, if the divi cover is say over 1.5x - then I think the divi level is justified, we won't really know this for another 9 months I guess. (or even 21 months?)

[montyhedge] 25/7/2018 11:14

You know my thoughts I just can't see BT and Vod keeping the dividends at current levels. But even if cut in half still a good dividend.

[hamhamham1] 25/7/2018 11:05

I think Vodafone needed better figures to justify the 0.76x divi cover.


(published 26/6/18)

Forecast Divi Cover 2018
1.01x - Direct Line.
1.68x - Evraz.
1.14x - Persimmon.
1.36x - Taylor Wimpey.
1.12x - Centrica.
1.49x - Barratt Develpoments.
1.71x - BT.
1.38x - Imperial Brands.
1.26x - SSE.
0.76x - Vodafone.

1.29x - Average.

[hamhamham1] 25/7/2018 08:34

toon. Yep, and it's probably a good thing if it does I guess, as it will pull BT with it. The day is young though ;)
I usually see the first hour as the crazy hour, let's see where the direction heads between 9 and 10, maybe that'll give a better indication as to the days direction?

[toon1966] 25/7/2018 08:32

VOD actually doing better than BT at this moment, still a long way to go in the day!

[hamhamham1] 25/7/2018 07:06

I think Vodafone will be down today. Who knows?
Because they operate in so many countries (own in 25 countries and partner in another 47) the future cost of buying 5G licences (local gov cash cows) and the associated fibre backhaul provisioning needed will cost a lot over the next 5/10 years. (But they will come good no doubt).
Thinking about it, that does mean that 5G will be mostly only deployed I guess in 1st world countries with large legacy fibre networks?