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BT heads for top-line growth thanks to impending price rises

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British telecoms firm BT has tapped top Blackstone executive Stephen Lewis to join its executive management team and lead all communications.
Stephen Lewis will join the executive management team at BT and lead all communications.

Analysts at European bank Berenberg have estimated that BT will return to top-line growth thanks to inflation-induced price rises.

Last week the British firm reported a two per cent fall in revenue to £20.9bn, but a two per cent increase in underlying profit (EBITDA) to £7.6bn as management continued to find cost efficiencies.

Weighing in on the company’s future outlook, Berenberg analyst Carl Murdock-Smith said: “Solid Q4 KPIs were encouraging as to how customers have reacted to these price increases being communicated,”.

“While we acknowledge two sentiment risks in the coming months (pay talks with the unions and the potential for network competition news from Liberty Global and Telefónica’s joint venture), we believe that BT moving to growth represents a watershed moment in the investment case.”, he added.

The group notably announced its new agreement to form a new sports joint venture with Warner Bros Discovery in the UK and Ireland.

The new 50:50 joint venture will bring together BT Sports and Eurosport, and represents a huge opportunity for the firm.

Berenberg echoed its previous ‘buy’ rating for BT with a price target of 220p, versus a current price of 179p.