Credit Suisse ups target price on BT

Credit Suisse has upped the price target for BT Group shares, and reiterated its ‘outperform’ rating, after the telecoms group hiked its prices.

BT – which also owns mobile phone brand EE – confirmed earlier this month that landline, broadband, TV, sport and mobile bills will increase in line with inflation plus 3.9% from March 2020.

Credit Suisse said it was increasing the target price to 185p from 180p after upgrading 2023 earnings per share forecasts by 4% on the back of the move.

It raised full-year 2022-23 EBITDA by 0-1% “to reflect the impact of the consumer price increases. Full-year 2022-23 EPS estimates rise 1-4% and BT Group FY 22-23 normalised free cashflow forecasts rise 1-5%.”

The bank said: “We reiterate our thesis of BT returning to EBITDA growth in 2022 as near-term Covid-19 impacts on global sports events and the UK economy reverse.

“We forecast a 1% BT Group EBITDA growth between 2020 and 2023 to £8.90bn, with consensus much too pessimistic, in our view, in forecasting a 4% decline over the same period.”

As at 1300 BST, shares in the blue chip were up nearly 2% at 100.79p.