BT Group plc

LSE:BT.A Stock Report

Market Cap: UK£14.5b

BT Group Valuation

Is BT.A undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of BT.A when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BT.A (£1.48) is trading below our estimate of fair value (£4.08)

Significantly Below Fair Value: BT.A is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BT.A?

Key metric: As BT.A is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for BT.A. This is calculated by dividing BT.A's market cap by their current earnings.
What is BT.A's PE Ratio?
PE Ratio18.9x
EarningsUK£766.00m
Market CapUK£14.47b

Price to Earnings Ratio vs Peers

How does BT.A's PE Ratio compare to its peers?

The above table shows the PE ratio for BT.A vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average16.4x
VOD Vodafone Group
9.1x4.2%UK£17.9b
GAMA Gamma Communications
26.7x12.7%UK£1.5b
TLKM Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia
12.1x6.9%Rp274.4t
KPN Koninklijke KPN
17.5x6.8%€14.0b
BT.A BT Group
18.9x14.1%UK£14.5b

Price-To-Earnings vs Peers: BT.A is expensive based on its Price-To-Earnings Ratio (18.9x) compared to the peer average (16.4x).

Price to Earnings Ratio vs Industry

How does BT.A's PE Ratio compare vs other companies in the European Telecom Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
BT.A 18.9xIndustry Avg. 18.1xNo. of Companies7PE01020304050+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: BT.A is expensive based on its Price-To-Earnings Ratio (18.9x) compared to the European Telecom industry average (18.1x).

Price to Earnings Ratio vs Fair Ratio

What is BT.A's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BT.A PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.9x
Fair PE Ratio20.3x

Price-To-Earnings vs Fair Ratio: BT.A is good value based on its Price-To-Earnings Ratio (18.9x) compared to the estimated Fair Price-To-Earnings Ratio (20.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst BT.A forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£1.48
UK£2.01
+36.3%
25.8%UK£2.90UK£1.10n/a17
Nov ’25UK£1.40
UK£2.02
+43.9%
26.0%UK£2.90UK£1.10n/a17
Oct ’25UK£1.45
UK£1.99
+37.6%
26.1%UK£2.90UK£1.10n/a18
Sep ’25UK£1.39
UK£1.95
+39.9%
27.1%UK£2.90UK£1.10n/a18
Aug ’25UK£1.39
UK£1.95
+40.3%
27.1%UK£2.90UK£1.10n/a18
Jul ’25UK£1.41
UK£1.95
+37.8%
27.2%UK£2.90UK£1.10n/a18
Jun ’25UK£1.31
UK£1.91
+46.0%
27.4%UK£2.90UK£1.10n/a18
May ’25UK£1.04
UK£1.82
+75.6%
29.3%UK£2.90UK£0.98n/a18
Apr ’25UK£1.10
UK£1.86
+69.6%
28.3%UK£2.90UK£0.98n/a17
Mar ’25UK£1.05
UK£1.86
+77.8%
28.1%UK£2.90UK£1.00n/a17
Feb ’25UK£1.09
UK£1.88
+72.0%
28.0%UK£2.90UK£1.00n/a17
Jan ’25UK£1.24
UK£1.90
+53.9%
27.8%UK£2.90UK£1.00n/a16
Dec ’24UK£1.24
UK£1.89
+52.6%
27.4%UK£2.90UK£1.00n/a16
Nov ’24UK£1.11
UK£1.87
+68.7%
26.9%UK£2.80UK£0.95UK£1.4017
Oct ’24UK£1.17
UK£1.82
+55.7%
28.5%UK£2.80UK£0.95UK£1.4517
Sep ’24UK£1.15
UK£1.87
+62.5%
27.3%UK£2.80UK£1.00UK£1.3917
Aug ’24UK£1.22
UK£1.90
+55.1%
27.6%UK£2.80UK£1.00UK£1.3917
Jul ’24UK£1.22
UK£1.89
+54.6%
27.8%UK£2.80UK£1.00UK£1.4118
Jun ’24UK£1.49
UK£1.92
+29.2%
26.2%UK£2.80UK£1.00UK£1.3118
May ’24UK£1.59
UK£1.89
+19.2%
28.2%UK£2.80UK£0.90UK£1.0420
Apr ’24UK£1.46
UK£1.88
+29.1%
29.1%UK£2.80UK£0.90UK£1.1020
Mar ’24UK£1.41
UK£1.87
+32.8%
30.0%UK£2.80UK£0.90UK£1.0520
Feb ’24UK£1.24
UK£1.84
+48.7%
29.8%UK£2.80UK£0.90UK£1.0921
Jan ’24UK£1.12
UK£1.89
+68.4%
29.9%UK£2.80UK£0.90UK£1.2421
Dec ’23UK£1.21
UK£1.95
+61.5%
28.6%UK£2.80UK£0.90UK£1.2421
Nov ’23UK£1.29
UK£2.05
+58.8%
26.0%UK£2.85UK£0.90UK£1.1121

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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