Citi ups price target on BT Group

The bank, which reiterated its ‘neutral’ rating, now has a target price of 185p on the blue chip, up from 175p.

It said: "We think BT has entered a phase of solid earnings before interest, tax, depreciation and amortisation growth, supported by CPI-indexed price increases, easing legacy headwinds and Covid recovery, and therefore expect full-year 2023 EBITDA to be close to its £9.7bn target."

Citi acknowledged that potential long-tail risks to the investment case included "losing high margin wholesale customers to alternative networks", including Virgin Media O2, and potential volatility surrounding Altice-founder Patrick Drahi’s 12.1% stake. The Franco-Israeli telecoms entrepreneur became BT’s largest shareholder earlier this year, fuelling speculation that Altice could launch a takeover bid.

But the bank concluded: "We maintain our ‘neutral’ rating with price target increase to 185p after factoring the lower fibre to the premises rollout costs and higher tax credits."

As at 1400, BT shares were ahead 2% at 163.55p. The stock, along with other European telecoms groups, received a boost early in trading after it emerged that US buyout firm KKR was considering taking Telecom Italia private.