Barclays upgrades BT to ‘equalweight’

Barclays lifted its stance on BT to ‘equalweight’ from ‘underweight’ on Tuesday, upping the price target to 130p from 115p as it said Openreach’s plans to build fibre-to-the-premises for 20 million homes over the next five to 10 years will be a positive.

"The challenges are to firstly secure favourable regulation (largely done), then build it (already well under way), and now to secure scale wholesale deals with the major UK service providers," Barclays said, adding that this could happen shortly.

"It would, in our view, likely be taken positively, and with telcos generally performing well this quarter we see positive catalysts ahead, and we upgrade our rating."

Still, Barclays said there are medium-term risks from both consumer pricing and fibre overbuild which could threaten longer-term free cash flow.