Stock market

Here’s where I see the BT share price ending in 2024.

Image Source: BT Group Plc

In March, I wrote about it Bt (LSE:BT.A) share price declines. The stock was down 26% year-to-date at the time, now it’s up 34%. In March, I concluded that I wanted to see some sort of catalyst before I was interested in buying.

Nothing has happened since then, so it’s time to stretch the horizon to the end of this year to see where things can go.

Costs more than pressing

Full-year results are out in a few weeks’ time, and will likely be a key driver for the share price both immediately and in the coming months.

Obviously, it’s impossible for me to predict what’s going to come out. However, I can look at recent earnings reports to get a feel for how things are at the moment. February’s trading update reiterated the message from other statements that the business is in a phase of building foundations for the future.

What this actually means is that costs are high right now, as it focuses on building and upgrading customers to full fiber broadband and 5G networks.

It will bring more benefits, but I can’t see it helping financially in 2024. So for investors focused on short-term results, I can’t envision them buying the stock anytime soon. From that angle, I struggle to see the share price above 104p by the end of the year.

Close to opening the trapdoor

At 104p, the share price is close to a 52-week low of 101p since earlier this year. The stock hasn’t traded below 100p since 2009, so it’s a really important price to keep an eye on. Although investors use a lot of fundamental analysis to decide what to buy and sell, it is true that psychological price points influence us.

Put another way, 100p is a key level in part because it is a round number and has three digits. If it falls below here, it could signal a bigger fall as some investors may decide to throw in the towel and use 100p as a line in the sand.

One sequence less

I expect the stock to end the year below 100p, but the exact level is hard to pin down. Based on the half-year results and guidance, revenues and profits are expected to remain roughly the same as last fiscal year.

Because of this, I would expect a continued slow grind in price through the end of the year. With seven months left to run and using past performance over the last 12 months, this would equate to a further 20% fall, taking the stock to around 83p.

I think there are risks. Among the main upcoming results will be amazing performance. Another risk would be if the benefits of the rollout come earlier than expected. This may cause some value investors to buy.

I’m happy to change my view if something unexpected happens, but at the moment I don’t see a compelling reason to buy BT shares.


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