Raymond James cuts BT to 'underperform'; sees headwinds from changing competitive landscape

Raymond James downgraded its stance on BT Group to ‘underperform’ from ‘strong buy’ and cut its price target to 438p from 500p on Thursday, pointing to a radical change in the competitive market.

“Significant competitive risks are set to materialise soon, creating a market where six-eight key brands compete for the same end-users,” said Raymond James.

It said BT will be facing an unprecedented string of competitive moves, with Sky and TalkTalk launching mobile, Vodafone launching broadband and Virgin Media and TalkTalk expanding their fibre network.

Raymond James said such factors may more than offset positives from BT’s cost-savings plan and the launch of UEFA games as early as this year.

“In this market transformation, experience from Spain has shown that key market share winners are smaller broadband players enjoying solid commercial momentum,” remarked Raymond James.

“Assuming a similar market transformation for the UK, BT would be significantly at risk due to its dominant positions.”
.