BT Group (LSE: BT.A) shares are widely held by UK private investors. That’s largely because formerly state-owned BT was privatised in three stages (in December 1984, December 1991, and July 1993). As a result of these epic share sales, hundreds of thousands of Brits became first-time investors. Even today, almost 37 years after the first flotation, the BT share price is closely watched all across the UK.
The rise and fall of the BT share price
At the end of last century, the BT share price was at a record high, closing at nearly 1,050p on 30 December 1999. But the shares, artificially pumped up during the dotcom boom, came crashing back to earth when this market bubble burst. On 14 March 2003, they closed at 160p, down almost six-sevenths (-84.8%) from their stratospheric highs. In the aftermath of the global financial crash of 2007-09, the BT share price closed below 77p on 27 March 2009. What a spectacular fall from grace.
However, the BT share price then roared back to life in a six-year comeback. On 27 November 2015, it closed a whisker short of £5. Alas, this was followed by another multi-year decline, with the stock crashing even further thanks to the Covid-19 crisis. On 29 September 2020, BT.A closed at 97.86p, back below £1 once again. But then came ‘Vaccine Monday’ (9 November 2020), when news of effective coronavirus vaccines had the world celebrating. Since late September, the BT share price has more than doubled, rising 95.3% to clear 191p as I write on Friday afternoon.
When will BT clear £2?
Yesterday, the BT share price hit an intraday high of 198.15p, its highest level since early January 2020, before Covid-19 menaced the world. What’s more, the shares are up two-thirds (67.6%) over the past 12 months. That’s a hefty reward for those brave or lucky enough to buy during 2020’s lows.
Last Thursday (3 June), I reported that Deutsche Bank had downgraded the BT share price to ‘sell’, with a reduced price target of 140p. I disagreed, arguing that, with the stock at 175.95p, “I’d be a cautious buyer at current levels”. The shares have since risen a further 8.7% to today’s 191.23p, having dropped around 7p since yesterday’s morning surge. This latest leap in BT shares followed news that French-Israeli billionaire Patrick Drahi’s Altice UK telecom group has bought almost an eighth (12.1%) of BT. Clearly, news of a new anchor shareholder in BT encouraged other investors to buy the stock. This pushed it to new 52-week highs.
I don’t own BT shares at present. However, I’m still positive on the BT share price, even after this recent rise. Indeed, I expect it to clear £2 soon. After all, the return of the 7.7p-a-share dividend should attract income investors like me keen to bank a dividend yield of 4% a year. Likewise, progress on BT’s pension deficit and a favourable wholesale market review would also support a higher BT share price.
But any comeback is likely to be a rocky road, given BT’s history and the immense challenges it faces. Notably, the group must commit billions of pounds in capital expenditure to roll out full-fibre broadband across the UK. Even so, with a new but highly experienced partner on board, the future may look brighter for £19.4bn BT and its long-suffering private shareholders!
Cliffdarcy 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.