Over the past year, the BT (LSE:BT.A) share price has risen 15%. This beats the FTSE 100 performance, with BT shares hitting fresh 52-week highs earlier this month. When looking ahead to 2025, I’ve been looking at the consensus forecasts from some of the big banks and brokers. Here’s the key points for investors to note.
Views from the experts
Of the 18 analysts included in the forecast submission, the average price target for the next year is 192p. When using the current share price of 158p, this indicates a potential increase of 21%.
Not all the research teams are on the same page though. HSBC has a target of 200p, above the average. On the other hand, the Deutsche Bank price forecast is only 140p.
Yet instead of focusing on just one contributor, taking the average is actually a good way for me to get an overall sentiment check for the stock. Based on the 192p figure, it’s clear to me that the overall skew of views is that there’s the potential for BT shares to keep moving higher next year.
As a disclaimer, forecasts don’t mean that the stock will definitely hit this level in the next year. They’re still only subjective views of the analyst or team.
Why the stock could do well
BT shares could rally next year, thanks to improving financials. In the latest half-year report, the CEO noted that as the full fibre roll out continues, “the cost to build continues to reduce, enabling us to increase this year’s build target to 4.2 million with no additional capex spend”.
In 2025, I expect cost pressures to continue to ease now the business has reached scale in the roll out. Further, investors should see this benefit pass through to stronger cash flow, which could enable the firm to allocate money towards new projects or even boost the dividend.
It’s interesting to note that outside investors are taking stakes in the company. Billionaire Carlos Slim continues to build his stake in the firm, now at 4.3%. Further, India’s Bharti Global recently completed the purchase of a 24.5% shareholding. In my view, high-profile stakes like this are a good sign for the future.
Caution needed
Despite all this good news, investors still need to be careful when thinking about investing here. For example, even with easing cost pressures, the company recently downgraded revenue guidance. This was put down to a “competitive retail environment”.
Ultimately, lower revenue’s an indication of lower demand from consumers. It’s too early to make a judgement here, but if revenue does materially fall in the next few quarterly updates, it’s a red flag to note.
Based on the analyst forecasts and other factors, I think BT shares are worth investors considering for 2025.
