Numis upgrades BT Group but says shares overvalued

Analysts at Numis upgraded their recommendation on shares of BT Group from 'sell' to 'reduce' after the share price moved to just 14% above their 140.0p target price.

Nevertheless, they predicted that so-called AltNets such as VM02 were set to consolidate "sooner rather than later", in order to gain scale, thus becoming a more meaningful threat to BT too.

"We believe BT remains materially overvalued, and that it is likely to be on the defensive for a long time," they added.

There was also the risk from VM02 wholesaling its wireline network and its proven ability to grow its network even as it was upgraded.

"BT is a tough investment no matter who runs or owns it."