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Will the BT share price hit 200p in 2022?

The BT Tower at night
Image: BT Group

The performance of the BT (LSE: BT-A) share price over the past five years has been far from impressive. Down 55% in this period, 2021 saw the stock reverse its poor form as it offered investors a glimpse of its potential. Up over 28% for the year, we saw a revival as the telecommunications giant stock ended the year trading at 169p. So, could 2021 prove to be a turning point for BT? And could the share price break the 200p barrier if it carries on its form in 2022? Let’s take a look.

BT progress

What I most like about BT is the progress it is making with its operations. After poor performances and stagnation in years gone by, 2021 saw it take great strides for the future. One way it is doing this is through the expansion of its full fibre broadband. Openreach, a division of the group, has now rolled out broadband to over 6m premises – and is on track for its 2026 target of 25m. Other measures include the continuous expansion of its 5G network, and the firm now has over 5m 5G-ready customers. With the potential for the UK to reach 800m 5G devices in 2022, according to the CCS, this shows the opportunity this market has to offer to BT. Should it be able to capitalise on this effectively, I think this could lead to us seeing a rise in the BT share price in 2022.

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Recent announcements by the firm’s management will also provide investors with confidence. BT has brought forward its FY25 target of £2bn in annualised savings by a year, while the group also reduced its capital expenditure for FY23 by £200m. As a potential investor, these are the signs I look for.

I also think potential takeover speculation could fuel a rise in the BT share price. Patrick Drahi, who now holds an 18% stake in the business, has made moves to further increase his control in the firm. Although he cannot mount a full takeover bid until June of this year, further talk of a takeover by the renowned telecoms investor could boost the share price.

BT share price risks

One concern I have with BT is the potential impact rising interest rates could have on the cost of the firm’s debt. BT’s debt is substantial – with its latest results indicating it sits at £18.2bn – and higher rates will mean higher costs for BT, potentially stunting its growth. While this may be in part attributed to the expansion I have highlighted above, this is an issue for me.

200p in 2022?

That said, I think 2022 could be a strong year for BT. While the potential rising debt is of concern, the firm is heading in the right direction with the moves it is making. Further speculation of a takeover as we edge closer to June will more than likely result in a rise from the current share price of 174p. The share price broke the 200p threshold in June last year, and prior to a dip at the beginning of 2020, we also saw the stock as high as 204p. As such, if BT can replicate its 2021 form, I think we could see the share price edge above the 200p mark. Because of this, I would look to buy some shares. 

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Charlie Keough has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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