The BT Group (LSE: BT.A) share price might have cooled a bit since its peaks of late summer last year. But we’re still looking at a 34% rise in the past 12 months. And since mid-December it’s been picking up a bit again.
Eyes will be on a third-quarter trading update due 5 February. So what can we expect, and where might BT shares go next?
We’ve had a few recent upgrades for BT share price targets, with Bank of America upping its take to 212p. That’s 13% ahead of the price at the time of writing (26 January), and it’s nowhere near the most enthusiastic. Berenberg sees a 34% price hike on the cards, with a 250p target.
But before we think analysts across the board are bullish about BT in 2026 and rush off to buy, UBS is decidedly downbeat. Its price expectation is set at a lowly 140p, down 25%, with the stock marked as a Sell.
Growth marching on?
Investors have been hanging on news of BT’s growth plans, and the costs of that growth. At the halfway stage, CEO Allison Kirkby said the company has “driven customer growth across Consumer broadband, mobile and TV and we’re stabilising our UK-focused Business division.” She also told us “Openreach full fibre broadband now reaches more than 20 million homes and businesses” and the “EE network is live with 5G+ coverage for 66% of the population.”
So the growth story for BT looks strong then? Well, maybe not. Analysts actually expect BT’s net sales to go nowhere in the next few years, staying level at close to the 2025 figure.
And then we come to the balance sheet, carrying net debt of around £20bn — and expected to stay there. But there’s another way to look at BT.
Cash cow?
Since the BT dividend was reset a few years ago, it’s looked solid. Forecasters predict a rise of 5% in total between 2025 and 2028, which is unlikely to beat inflation — certainly not if that doesn’t come down soon. But on the other hand, earnings should cover the payment between 1.7 times and 1.8 times. That’s much better cover than some of the FTSE 100‘s bigger dividend yields.
And BT’s forward yield, at 4.4%, is better than the Footsie average. I rate it as likely to be one of the more reliable ones going forwards.
The debt does concern me. But if BT can keep servicing it at reasonable cost — which it seems to be doing — prioritising dividends could be the best policy for shareholders.
So what will happen?
The start-stop feel I get from BT’s growth prospects makes me think the share price could struggle this year. And in the long term, we’re surely going to see multiple phases of technology expansion — with their costs.
But looking at BT as a long-term income investment makes me feel a fair bit more positive. And on that basis, BT gets my thumbs-up as one to consider for 2026.
